Quantitative Easing and Bank Risk taking: Evidence from Lending

John Kandrac · Bernd Schlusche

66 citations0/0 files storedFinance and Economics Discussion Series

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Banking stability, regulation, efficiency Monetary Policy and Economic Impact Economic theories and models

Abstract

We empirically assess the effect of reserve accumulation as a result of quantitative easing (QE) on bank-level lending and risk taking activity. To overcome the endogeneity of bank-level reserve holdings to banks' other portfolio decisions, we employ instruments made available by a regulatory change that strongly influenced the distribution of reserves in the banking system. Consistent with theories of the portfolio substitution channel in which the transmission of QE depends in part on reserve creation itself, we document that reserves created in two distinct QE programs led to higher total loan growth and an increase in the share of riskier loans, such as commercial real estate, construction, C&I, and consumer loans, within banks' loan portfolios.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 66 citations exist upstream.

References

2008Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches 1969A General Equilibrium Approach To Monetary Theory 1995Inside the Black Box: The Credit Channel of Monetary Policy Transmission 2009Bank lending during the financial crisis of 2008 2000What Do a Million Observations on Banks Say About the Transmission of Monetary Policy?2011Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism?1998It's Baaack: Japan's Slump and the Return of the Liquidity Trap 2014Hazardous Times for Monetary Policy: What Do Twenty-Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk-Taking?

Cited by

2020The conditioning role of performance on the bank risk-taking channel of monetary policy: Evidence from a multiple-tool regime 2018(Un)Conventional monetary policy and bank risk-taking: A nonlinear relationship 2018Did Negative Interest Rates Improve Bank Lending?2022What lies beneath—Negative interest rates and bank lending 2021Do negative interest rates affect bank risk-taking?

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.