This paper studies the impact of the negative interest rate policy (NIRP) on euro area banks’ interest rate margins, using bank-individual data for the 2007-2019 period. An important extension to other studies is our breakdown of banks’ interest rate margin into a funding and lending...

Faced with a potential zero lower bound on deposit interest rates, how do banks pass onthe fall in net interest income due to negative interest rates? This paper aims to investigatethe different channels of banks’ responses to negative interest rates using a detailedbreakdown of the profit and...

In this paper, we survey the nascent literature on the transmission of negative policy rates. We discuss the theory of how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the growing evidence that negative policy rates are...

Post-2014, the zero lower bound on household deposits has intensified the downward pressure of the ECB's accommodative monetary policy on banks' net interest margins. Using a shadow rate to capture the stance of (unconventional) monetary policy, we construct counterfactual deposit rates,...

In this article, we review the nascent literature on the transmission of negative policy rates. We discuss the theory of how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the growing evidence that negative policy rates are...

Faced with a potential zero lower bound on deposit interest rates, how do banks pass on thefall in net interest income due to negative interest rates? This paper aims to investigate thedifferent channels of banks’ responses to negative interest rates using a detailed breakdownof the profit and...