Ioannidou, VassoOngena, StevenPeydró, José-Luis2020-01-132020-01-132015Ioannidou V, Ongena S, Peydró JL. Monetary policy, risk-taking and pricing: evidence from a quasi-natural experiment. Review of Finance. 2015 Mar;19(1):95-144. DOI: 10.1093/rof/rfu0351572-3097http://hdl.handle.net/10230/43263We study the risk-taking channel of monetary policy in Bolivia, a dollarized country where monetary changes are transmitted exogenously from the USA. We find that a lower policy rate spurs the granting of riskier loans, to borrowers with worse credit histories, lower ex-ante internal ratings, and weaker ex-post performance (acutely so when the rate subsequently increases). Effects are stronger for small firms borrowing from multiple banks. To uniquely identify risk-taking, we assess collateral coverage, expected returns, and risk premia of the newly granted riskier loans, finding that their returns and premia are actually lower, especially at banks suffering from agency problems.application/pdfeng© Oxford University Press. This is a pre-copyedited, author-produced version of an article accepted for publication in Review of Finance following peer review. The version of record Ioannidou V, Ongena S, Peydró J-L. Monetary policy, risk-taking and pricing: evidence from a quasi-natural experiment. Review of Finance. 2015 Mar;19(1):95-144. DOI: 10.1093/rof/rfu035 is available online at: https://academic.oup.com/rof/article-abstract/19/1/95/1631255 and https://doi.org/10.1093/rof/rfu035info:eu-repo/semantics/articlehttp://dx.doi.org/10.1093/rof/rfu035Monetary policyLow short-term interest ratesSoftening lending standardsCredit riskLiquidity riskSubprime borrowersBank agency problemsDuration analysisinfo:eu-repo/semantics/openAccess