Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210094
Authors: 
Karapetyan, Artashes
Year of Publication: 
2016
Series/Report no.: 
Working Paper No. 5/2016
Publisher: 
Norges Bank, Oslo
Abstract: 
We identify the effects of monetary policy on credit risk-taking using a unique dataset covering the population of corporate borrowers in Norway. We find that a lower benchmark interest rate (interbank rates or overnight rates) induces the average bank to grant more loans to risky firms. We also find that the strength of the bank's balance-sheet is important: less capitalized banks are more likely to increase loan volumes to ex-ante risky firms compared to more capitalized ones (Jimenez et al., 2014). The data allow us to distinguish the changes in the supply of credit from the changes in credit demand. In all our specifications we control for both observed and unobserved firm and bank heterogeneity by using financial statement information and firm, bank and time fixed effects.
Subjects: 
risk-taking channel
monetary policy
financial stability
credit risk
JEL: 
E44
E5
G01
G21
G28
L14
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-903-6
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.no
Document Type: 
Working Paper
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