Targeted monetary policy, dual rates and bank risk taking

Arbeitspapier

We assess whether central bank credit operations influence the size and composition of bank credit in a negative interest rate environment. We exploit confidential information from the newly established European credit registry to capture bank lending conditions and bank risk-taking. For identification, we use high-frequency reactions of bank bonds around the announcement of the April 2020 recalibration of the ECB's Targeted Longer-Term Refinancing Operations (TLTROs). We find that the credit easing measures had a strong positive effect on bank credit, even when controlling for possible confounding factors. The increase in lending was not accompanied by excessive risk-taking, especially for banks with low intermediation margin, that is, those that were poised to benefit the most from TLTROs' borrowing rates below the interest rates on central bank reserves.

Angaben zum Objekt

• ISBN: 978-92-899-5266-8
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ECB Working Paper ; No. 2682

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Money Supply; Credit; Money Multipliers ; Monetary Policy ; Financial Crises ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: unconventional monetary policy ; bank lending ; risk-taking ; dual rates

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Barbiero, Francesca ; Burlon, Lorenzo ; Dimou, Maria ; Toczynski, Jan
• Ereignis: Veröffentlichung
• (wer): European Central Bank (ECB)
• (wo): Frankfurt a. M.
• (wann): 2022

Weitere Informationen

• DOI: doi:10.2866/530966
• Handle: http://hdl.handle.net/10419/269089
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ