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SUMMARY:Life below zero: Bank lending under negative policy rates
DTSTART:20170210T103000
DTEND:20170210T120000
DTSTAMP:20260603T134730Z
UID:ee0aa2c49feb3b8a241aceb091c5ba45be7f932ae1277541bbe61d18
CATEGORIES:Conferences - Seminars
DESCRIPTION:Florian HEIDER (European Central Bank)\nWe show that negative 
 policy rates transmit to the real sector via bank lending in a novel way. 
 The European Central Bank's introduction of negative rates in June 2014 in
 duces banks with more deposits to concentrate their lending on riskier bor
 rowers. A one-standard-deviation increase in banks' deposit ratio leads to
  the financing of firms with 16% higher return-on-assets volatility and to
  a reduction in lending of 9%. Conversely\, a placebo at the time when pol
 icy rates fall\, but are still non-negative\, shows no effect. New risky b
 orrowers appear financially constrained\, come from industries known to th
 e bank\, and invest more after receiving a loan. Banks do not adjust loan 
 terms\, and the risk taking is concentrated in poorly capitalized banks. B
 esides highlighting the role of banks' funding structure for monetary-poli
 cy transmission\, our results point to distributional consequences with po
 tential risks to financial stability.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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