Negative interest rates policy and banks’ risk-taking: Empirical evidence

Whelsy Boungou

Economics Letters, 2020, vol. 186, issue C

Abstract: Using a panel dataset of 9421 banks from 59 countries over the period 2009–2018 and a Difference-in-Differences estimator, this paper aims to assess the effects of negative interest rates on banks’ risk-taking. We find that banks’ risk-taking has been lower in countries where negative rates have been implemented. This effect depends on the characteristics of a country’s banking system, namely the level of capitalization and size.

Keywords: Negative interest rates; Bank risk-taking; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 G21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Working Paper: Negative Interest Rates Policy and Banks' Risk-Taking: Empirical Evidence (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519303817

DOI: 10.1016/j.econlet.2019.108760

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