Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/153600 
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper No. 1166
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper investigates the relationship between short-term interest rates and bank risk. Using a unique database that includes quarterly balance sheet information for listed banks operating in the European Union and the United States in the last decade, we find evidence that unusually low interest rates over an extended period of time contributed to an increase in banks' risk. This result holds for a wide range of measures of risk, as well as macroeconomic and institutional controls.
Subjects: 
bank risk
credit crisis
monetary policy
JEL: 
E44
E55
G21
Document Type: 
Working Paper

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