Bank Intermediation Margin in Time of Negative Interest Rate Policy

Boungou, Whelsy; Mawusi, Charles

doi:10.2139/ssrn.3495247

SSRN Journal

2019

DOI: 10.2139/ssrn.3495247

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Bank Intermediation Margin in Time of Negative Interest Rate Policy

Whelsy Boungou

Charles Mawusi

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“…Boungou and Mawusi (2020) also find a reduction in the cost of lending in countries affected by negative interest rates.17 Using the experience in Japan,Hong and Kandrac (2018) find that credit supply increased more for banks that were more affected by NIRP.…”

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Empirical evidence of the lending channel of monetary policy under negative interest rates

Boungou

2021

The Quarterly Review of Economics and Finance

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Does the lending channel of monetary policy operate under a negative interest rate policy (NIRP)? The purpose of this study is to shed light on the existence of a lending channel of monetary policy under NIRP. To do so, we aim to provide an in-depth analysis of the relationship between NIRP and banklending behavior. To achieve this, we employ a large panel dataset of 4072 banks operating in 54 countries over the period 2009-2018 and a Difference-in-Differences methodology. We find that banks located in countries affected by negative interest rates have adjusted their bank-lending behavior by increasing lending activities. Our findings suggest that in response to negative interest rates, banks have reduced their lending cost, and increased lending supply, especially for loans longer than 3 months. Finally, we also find that the transmission of monetary policy under negative interest rates to the real economy depends on banks' specific characteristics such as reliance on retail deposits and size.

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Empirical evidence of the lending channel of monetary policy under negative interest rates

Boungou

2021

The Quarterly Review of Economics and Finance

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Empirical Evidence of the Lending Channel of Monetary Policy under Negative Interest Rates

Boungou

2020

SSRN Journal

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Bank Intermediation Margin in Time of Negative Interest Rate Policy

Cited by 2 publications

References 25 publications

Empirical evidence of the lending channel of monetary policy under negative interest rates

Empirical evidence of the lending channel of monetary policy under negative interest rates

Empirical Evidence of the Lending Channel of Monetary Policy under Negative Interest Rates

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