Monetary Conditions and Banks' Behaviour in the Czech Republic

Adam Gersl, Petr Jakubík, Dorota Kowalczyk, Steven Ongena and Jose-Luis Peydro

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: This paper examines the impact of monetary conditions on the risk-taking behaviour of banks in the Czech Republic by analysing the comprehensive credit register of the Czech National Bank. Our duration analysis indicates that expansionary monetary conditions promote risk-taking among banks. At the same time, a lower interest rate during the life of a loan reduces its riskiness. While seeking to assess the association between banks’ appetite for risk and the short-term interest rate we answer a set of questions related to the difference between higher liquidity versus credit risk and the effect of the policy rate conditioned on bank and borrower characteristics.

Keywords: Business cycle; credit risk; financial stability; lending standards; liquidity risk; monetary policy; policy interest rate; risk-taking. (search for similar items in EconPapers)
JEL-codes: E44 E5 G21 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://www.cnb.cz/export/sites/cnb/en/economic-re ... wp/cnbwp_2012_02.pdf

Related works:
Journal Article: Monetary Conditions and Banks’ Behaviour in the Czech Republic (2015)
Journal Article: Monetary conditions and banks’ behaviour in the Czech Republic (2015)
Working Paper: Monetary conditions and banks' behaviour in the Czech Republic (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2012/02

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