Interest Rates, Capital and Bank Risk-Taking

2018 ◽  
Author(s):  
Jonathan Acosta Smith
Keyword(s):  
Interest Rates ◽  
Risk Taking ◽  
Bank Risk

scholarly journals Risk-taking behavior, earnings quality, and bank performance: A profit frontier approach

2020 ◽  
Vol 23 (4) ◽  
pp. 285-304
Author(s):  
M. Pilar García-Alcober ◽  
Diego Prior ◽  
Emili Tortosa-Ausina ◽  
Manuel Illueca
Keyword(s):  
Financial Crisis ◽  
Interest Rates ◽  
Risk Taking ◽  
Banking System ◽  
Jel Classification ◽  
Bank Risk ◽  
Bank Performance ◽  
Bank Efficiency ◽  
Savings Banks ◽  
Risk Taking Behavior

After the financial crisis of 2007–2008, some bank performance dimensions have been the subject of debate, two of which are bank efficiency and bank risk-taking behavior. The literature on bank efficiency and productivity has grown considerably over the past three decades, and has gained momentum in the aftermath of the financial crisis. Interest in bank risk-taking behavior, usually focusing on its links to monetary policy, has been relatively low, but has also increased exponentially in more recent years. This article combines these two streams of research. Specifically, we test whether more inefficient banks take greater risks when selecting borrowers, charging interests, and requiring collateral, and whether these links between inefficiency and risk change according to the type of bank. Our analysis centers on the Spanish banking system, which has been severely affected by the burst of the housing bubble and has undergone substantial restructuring. To test our hypotheses, we created a database with information on banks and savings banks, their borrowers (non-financial firms), and the links between them. The study also contributes to the literature by considering a novel profit frontier approach. Our results suggest that more inefficient banks take greater risks in selecting their borrowers, and that this high-taking behavior is not offset by higher interest rates. JEL CLASSIFICATION C14; C61; G21; L50

Interest Rates and the Bank Risk-Taking Channel

2013 ◽  
Vol 5 (1) ◽  
pp. 123-141 ◽  
Author(s):  
Giovanni Dell’Ariccia ◽  
Robert Marquez
Keyword(s):  
Interest Rates ◽  
Risk Taking ◽  
Bank Risk

scholarly journals Do negative interest rates affect bank risk-taking?

2021 ◽  
Author(s):  
Alessio Bongiovanni ◽  
Alessio Reghezza ◽  
Riccardo Santamaria ◽  
Jonathan Williams
Keyword(s):  
Interest Rates ◽  
Risk Taking ◽  
Bank Risk ◽  
Negative Interest Rates

Real interest rates, leverage, and bank risk-taking

2014 ◽  
Vol 149 ◽  
pp. 65-99 ◽  
Author(s):  
Giovanni DellʼAriccia ◽  
Luc Laeven ◽  
Robert Marquez
Keyword(s):  
Interest Rates ◽  
Risk Taking ◽  
Bank Risk ◽  
Real Interest Rates

scholarly journals Interest rates and bank risk-taking

2011 ◽  
Vol 35 (4) ◽  
pp. 840-855 ◽  
Author(s):  
Manthos D. Delis ◽  
Georgios P. Kouretas
Keyword(s):  
Interest Rates ◽  
Risk Taking ◽  
Bank Risk

scholarly journals Low Interest Rates and Bank Risk-Taking: Has the Crisis Changed Anything? Evidence from the Eurozone

2015 ◽  
Vol 8 (1) ◽  
pp. 125-148 ◽  
Author(s):  
Alin Marius Andries ◽  
Vasile Cocriş ◽  
Ioana Pleşcău
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Risk Taking ◽  
Fixed Effects ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Bank Risk ◽  
Fixed Effects Model ◽  
Loan Loss ◽  
The Impact

AbstractThis paper examines the impact of monetary policy on bank risk-taking and the influence of the recent financial crisis on this relation. We use a dataset of 571 commercial banks from Eurozone and analyze the relation on the period from 1999 to 2011, with emphasize on the period 2008 to 2011. We use non-performing loans, loan loss provisions and Z-score as measures for bank risk-taking, while for monetary policy the proxies are short-term interest rates (computed using a Taylor rule) and long-term interest rates. We determine the relation between the two by taking into account some specific control variables and analyze it using an entity fixed-effects model and Generalized Method of Moments, alternatively. Empirical results point to a negative relation between interest rates and bank risk-taking. In addition to this, results show that the crisis has led to an additional negative impact on the relation between interest rates and bank risk-taking for the turmoil period 2008-2011.

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