Does monetary policy affect bank risk-taking?

Arbeitspapier

This paper investigates the relationship between short-term interest rates and bank risk. Using a unique database that includes quarterly balance sheet information for listed banks operating in the European Union and the United States in the last decade, we find evidence that unusually low interest rates over an extended period of time contributed to an increase in banks' risk. This result holds for a wide range of measures of risk, as well as macroeconomic and institutional controls.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 1166

Classification and Topics

• Classification: Wirtschaft ; Financial Markets and the Macroeconomy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Subject: bank risk ; credit crisis ; monetary policy ; Geldpolitik ; Kreditgeschäft ; Geldpolitische Transmission ; Bankrisiko ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Altunbas, Yener ; Gambacorta, Leonardo ; Marqués-Ibáñez, David
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/153600
• Last update: 10.03.2025, 11:43 AM CET