This study investigates how bank competition affects the transmission of monetary policy through risk-taking channel. Using Japanese matched bank-firm loan data from the fiscal year 2005 to 2018, we test whether banks with weak balance-sheet lend to risky firms during low interest rate...

This paper shows that the supply side of credit is a major factor for the phenomenonof hampered interest rate pass-through in monopolistic banking markets. Our data,covering all 1,555 small and medium sized banks in Germany, provides a clear wayto partial out demand shocks; we are thus able to...