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Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates

Research output: Working paper

Standard Standard

Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. / Altunbas, Yener; Avignone, Giuseppe; Kok, Christoffer et al.
European Central Bank, 2023. (Working Paper Series; No. 2790).

Research output: Working paper

HarvardHarvard

Altunbas, Y, Avignone, G, Kok, C & Pancaro, C 2023 'Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates' Working Paper Series, no. 2790, European Central Bank. https://doi.org/10.2139/ssrn.4368836

APA

Altunbas, Y., Avignone, G., Kok, C., & Pancaro, C. (2023). Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. (Working Paper Series; No. 2790). European Central Bank. https://doi.org/10.2139/ssrn.4368836

CBE

Altunbas Y, Avignone G, Kok C, Pancaro C. 2023. Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. European Central Bank. (Working Paper Series; 2790). https://doi.org/10.2139/ssrn.4368836

MLA

Altunbas, Yener et al. Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. Working Paper Series; 2790. European Central Bank. 2023., 52 p. https://doi.org/10.2139/ssrn.4368836

VancouverVancouver

Altunbas Y, Avignone G, Kok C, Pancaro C. Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. European Central Bank. 2023 Feb 1. (Working Paper Series; 2790). doi: http://dx.doi.org/10.2139/ssrn.4368836

Author

Altunbas, Yener ; Avignone, Giuseppe ; Kok, Christoffer et al. / Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates. European Central Bank, 2023. (Working Paper Series; 2790).

RIS

TY - UNPB

T1 - Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates

AU - Altunbas, Yener

AU - Avignone, Giuseppe

AU - Kok, Christoffer

AU - Pancaro, Cosimo

N1 - All rights reserved. Any reproduction, publication and reprint in the form of a different publication, whether printed or produced electronically, in whole or in part, is permitted only with the explicit written authorisation of the ECB or the authors.

PY - 2023/2/1

Y1 - 2023/2/1

N2 - This paper investigates to what extent the introduction of negative monetary policy rates altered the competitive behaviour in the euro area banking sector. Specifically, it analyses the effect that negative policy rates had on euro area banks’ market power in comparison to banks that have not been subject to negative rates. The analysis, considering a sample of 4,223 banks over the period 2011–2018 and relying on a difference-in-differences methodology, finds that negative monetary policy rates led to an increase in euro area banks’ market power. Furthermore, it shows that, during the negative interest rate policy period, change in banks’ competitive behaviour affected the bank lending channel and discouraged banksfrom taking excessive risks.

AB - This paper investigates to what extent the introduction of negative monetary policy rates altered the competitive behaviour in the euro area banking sector. Specifically, it analyses the effect that negative policy rates had on euro area banks’ market power in comparison to banks that have not been subject to negative rates. The analysis, considering a sample of 4,223 banks over the period 2011–2018 and relying on a difference-in-differences methodology, finds that negative monetary policy rates led to an increase in euro area banks’ market power. Furthermore, it shows that, during the negative interest rate policy period, change in banks’ competitive behaviour affected the bank lending channel and discouraged banksfrom taking excessive risks.

UR - https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2790~9e2844fdb8.en.pdf?4fa7b3c0d584bfcc72987910fdd996d4

U2 - http://dx.doi.org/10.2139/ssrn.4368836

DO - http://dx.doi.org/10.2139/ssrn.4368836

M3 - Working paper

T3 - Working Paper Series

BT - Euro Area Banks’ Market Power, Lending Channel and Stability: The Effects of Negative Policy Rates

PB - European Central Bank

ER -