EconPapers    
Economics at your fingertips  
 

Do Negative Interest Rates Make Banks Less Safe?

Federico Nucera (), Andre Lucas (), Julia Schaumburg () and Bernd Schwaab

No 17-041/IV, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We study the impact of increasingly negative central bank policy rates on banks' propensity to become undercapitalized in a financial crisis (`SRisk'). We find that the risk impact of negative rates depends on banks' business models: Large banks with diversified income streams are perceived as less risky, while smaller and more traditional banks are perceived as more risky. Policy rate cuts below zero trigger different SRisk responses than an equally-sized cut to zero.

Keywords: negative interest rates; bank business model; systemic risk; unconventional monetary policy measures (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Date: 2017-04-25
New Economics Papers: this item is included in nep-ban and nep-cba
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
https://papers.tinbergen.nl/17041.pdf (application/pdf)

Related works:
Journal Article: Do negative interest rates make banks less safe? (2017) Downloads
Working Paper: Do negative interest rates make banks less safe? (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20170041

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().

 
Page updated 2020-09-20
Handle: RePEc:tin:wpaper:20170041