Bank risk-taking and impaired monetary policy transmission

Detalhes bibliográficos
Autor(a) principal: Koenig, Philipp
Data de Publicação: 2021
Outros Autores: Schliephake, Eva
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.14/36172
Resumo: We consider a standard banking model with agency frictions to simultaneously study the weakening and reversal of monetary transmission and banks’ risk-taking in a low-interest environment. Both, weaker monetary transmission and higher risk-taking arise because lower policy rates impair banks’ net worth.The pass-through to deposit rates, the level of excess reserves and the extent of the agency problem between banks and depositors are crucial determinants of monetary transmission. If the deposit pass-through is sufficiently impaired, a reversal rate exists. For policy rates below the reversal rate further interest rate reductions lead to a disproportionate increase in risk-taking and a contraction in loan supply.
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spelling Bank risk-taking and impaired monetary policy transmissionMonetary policyBank lendingRisk-taking channelReversal rateWe consider a standard banking model with agency frictions to simultaneously study the weakening and reversal of monetary transmission and banks’ risk-taking in a low-interest environment. Both, weaker monetary transmission and higher risk-taking arise because lower policy rates impair banks’ net worth.The pass-through to deposit rates, the level of excess reserves and the extent of the agency problem between banks and depositors are crucial determinants of monetary transmission. If the deposit pass-through is sufficiently impaired, a reversal rate exists. For policy rates below the reversal rate further interest rate reductions lead to a disproportionate increase in risk-taking and a contraction in loan supply.Veritati - Repositório Institucional da Universidade Católica PortuguesaKoenig, PhilippSchliephake, Eva2021-12-13T16:19:31Z2021-09-202021-09-20T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/36172eng10.2139/ssrn.3925073info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-12T17:41:40Zoai:repositorio.ucp.pt:10400.14/36172Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:29:22.397710Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Bank risk-taking and impaired monetary policy transmission
title Bank risk-taking and impaired monetary policy transmission
spellingShingle Bank risk-taking and impaired monetary policy transmission
Koenig, Philipp
Monetary policy
Bank lending
Risk-taking channel
Reversal rate
title_short Bank risk-taking and impaired monetary policy transmission
title_full Bank risk-taking and impaired monetary policy transmission
title_fullStr Bank risk-taking and impaired monetary policy transmission
title_full_unstemmed Bank risk-taking and impaired monetary policy transmission
title_sort Bank risk-taking and impaired monetary policy transmission
author Koenig, Philipp
author_facet Koenig, Philipp
Schliephake, Eva
author_role author
author2 Schliephake, Eva
author2_role author
dc.contributor.none.fl_str_mv Veritati - Repositório Institucional da Universidade Católica Portuguesa
dc.contributor.author.fl_str_mv Koenig, Philipp
Schliephake, Eva
dc.subject.por.fl_str_mv Monetary policy
Bank lending
Risk-taking channel
Reversal rate
topic Monetary policy
Bank lending
Risk-taking channel
Reversal rate
description We consider a standard banking model with agency frictions to simultaneously study the weakening and reversal of monetary transmission and banks’ risk-taking in a low-interest environment. Both, weaker monetary transmission and higher risk-taking arise because lower policy rates impair banks’ net worth.The pass-through to deposit rates, the level of excess reserves and the extent of the agency problem between banks and depositors are crucial determinants of monetary transmission. If the deposit pass-through is sufficiently impaired, a reversal rate exists. For policy rates below the reversal rate further interest rate reductions lead to a disproportionate increase in risk-taking and a contraction in loan supply.
publishDate 2021
dc.date.none.fl_str_mv 2021-12-13T16:19:31Z
2021-09-20
2021-09-20T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.14/36172
url http://hdl.handle.net/10400.14/36172
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 10.2139/ssrn.3925073
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dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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