Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154336
Authors: 
Dell’Ariccia, Giovanni
Laeven, Luc
Suarez, Gustavo A.
Year of Publication: 
2016
Series/Report no.: 
ECB Working Paper 1903
Abstract: 
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on banks’ internal ratings on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (measured by the risk rating of new loans) is negatively associated with increases in short-term interest rates. This relationship is more pronounced in regions that are less in sync with the nationwide business cycle, and less pronounced for banks with relatively low capital or during periods of financial distress.
Subjects: 
banks
interest rates
leverage
monetary policy
risk
JEL: 
E43
E52
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2056-8
Document Type: 
Working Paper

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