This paper develops a model to assess how monetary policy rates affect bank risk-taking. In the model, a reduction in the risk-free rate increases lending profitability by reducing funding costs and increasing the surplus the monopolistic bank extracts from borrowers. Under limited liability,...

This paper develops a model to assess how monetary policy rates affect bank risk-taking. In the model, a reduction in the risk-free rate increases lending profitability by reducing funding costs and increasing the surplus the monopolistic bank extracts from borrowers. Under limited liability,...

Heavy foreign exchange intervention by central banks of emerging markets have lead to sizeable expansions of their balance sheets in recent years?accumulating foreign assets and non-money domestic liabilities (the latter due to sterilization operations). With domestic liabilities being mostly of...

This paper studies how banks' balance sheets and funding costs interact in the transmission of monetary-policy rates to banks' credit supply to firms. To do so, we use creditregistry data from Germany and Portugal together with the European Central Bank's policy-rate cuts in mid-2014. The...

This paper focuses on the role of the banking sector in monetary policy transmission in an emerging economy with a rapidly developing financial system. Specifically, we exam whether the central bank's monetary policy stance affects banks' lending behaviour. Based on a comprehensive quarterly...

Korean Abstract: 이 논문에서는 은행별 BIS비율에서 도출한 자산에 대한 위험가중치를 이용하여 금리와 은행의 수익 및 자산구조가 은행의 위험수준에 미치는 영향을 살펴보았다. 분석결과, 우리나라의 경우 단기금리가...

U.S. banks obtain most of their funding from a combination of low-interest deposits and high-interest deposits. Using local demographic variations as instruments for banks' liability composition, I show that when monetary policy tightens, banks with a larger proportion of low-interest deposits...

As well as highlighting why macro prudential policy tools serve as vital complements to monetary policy tools, this paper aims to highlight why the question relating to the suitability of monetary policy as a tool for facilitating financial stability has constituted a topic of contentious...

U.S. banks obtain most of their funding from a combination of zero-interest deposits and interest-bearing deposits. Using local demographic variations as instruments for banks' liability composition, I show that when monetary policy tightens, banks with a larger proportion of zero-interest...

Monetary policy transmission may be impaired if banks rebalance their portfolios towards securities. We identify the bank lending and risk-taking channels of monetary policy by exploiting – Italian's unique – credit and security registers. In crisis times, with higher ECB liquidity, less...