Monetary conditions and banks’ behaviour in the Czech Republic

Citació

  • Geršl A, Jakubik P, Kowalczyk D, Ongena S, Peydró JL. Monetary conditions and banks’ behaviour in the Czech Republic. Open Economies Review. 2015 Jul;26(3):407-45. DOI: 10.1007/s11079-015-9355-y

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Descripció

  • Resum

    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.
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