Bank risk-taking and impaired monetarypolicy transmission

Saved in:

Authors and Corporations:

Koenig, Philipp J. (Author), Schliephake, Eva (Author)

Other Authors:

Schliephake, Eva 1983- [Author]

Type of Resource:

E-Book

Language:

English

published:

Frankfurt am Main Deutsche Bundesbank [2021]

Series:

Subjects:

Monetary policy

Bank lending

Risk-taking channel

Reversal rate

Graue Literatur

Source:

Verbunddaten SWB
Lizenzfreie Online-Ressourcen

ISBN:

9783957298508

Description
Summary:	We consider a standard banking model with agency frictions to simultaneously studythe weakening and reversal of monetary transmission and banks’ risk-taking in alow-interest environment. Both, weaker monetary transmission and higher risk-taking arise because lower policy rates impair banks’ net worth. The pass-throughto deposit rates, the level of excess reserves and the extent of the agency problembetween banks and depositors are crucial determinants of monetary transmission.If the deposit pass-through is sufficiently impaired, a reversal rate exists. For policyrates below the reversal rate further interest rate reductions lead to a disproportionalincrease in risk-taking and a contraction in loan supply.
Physical Description:	1 Online-Ressource (circa 30 Seiten)
ISBN:	9783957298508