Arbeitspapier
Monetary Policy, Funding Cost and Banks' Risk-Taking: Evidence from the United States
How much deposits and equity a bank has influences how a banks' lending responds to monetary policy. While the responsiveness for the bank lending channel has been well established, this is not the case for the risk-taking channel (RTC). We show in a value-at-risk RTC model that the lending for banks with relatively more equity and non-interest-bearing deposits should respond less to monetary policy tightening. This suggests that non-interest-bearing deposits act as "pseudo capital". In a panel of US banks, we find strong evidence in support of our model for various risk measures.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 9995
- Classification
-
Wirtschaft
Interest Rates: Determination, Term Structure, and Effects
Monetary Policy
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- Subject
-
bank lending
deposits
value-at-risk
pseudo capital
- Event
-
Geistige Schöpfung
- (who)
-
Bürgi, Constantin
Jiang, Bo
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Bürgi, Constantin
- Jiang, Bo
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2022
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