Monetary Conditions and Banks’ Behaviour in the Czech Republic

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

Open Economies Review, 2015, vol. 26, issue 3, 407-445

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. Copyright Springer Science+Business Media New York 2015

Keywords: Business cycle; Credit risk; Financial stability; Lending standards; Monetary policy; Risk-taking; E5; E44; G21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (19)

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Journal Article: Monetary conditions and banks’ behaviour in the Czech Republic (2015)
Working Paper: Monetary conditions and banks' behaviour in the Czech Republic (2015)
Working Paper: Monetary Conditions and Banks' Behaviour in the Czech Republic (2012)
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DOI: 10.1007/s11079-015-9355-y

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