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Impact of Monetary Policy on Credit Risk by burgundyrafaelarhb4 is a document available to read on EtoBox.
What is Impact of Monetary Policy on Credit Risk about?
The paper investigates how monetary policy affects credit risk-taking by analyzing 23 million bank loans in Spain. It finds that lower overnight interest rates lead lowly capitalized banks to grant more loans to risky firms with less collateral, resulting in a higher likelihood of default. The study highlights the risk-taking channel of monetary policy, showing that banks with less capital are more prone to take risks when interest rates are low.
- Author
- burgundyrafaelarhb4
- Language
- EN