Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222544
Authors: 
Bednarek, Peter
Dinger, Valeriya
te Kaat, Daniel Marcel
von Westernhagen, Natalja
Year of Publication: 
2020
Series/Report no.: 
Bundesbank Discussion Paper No. 36/2020
Abstract: 
This paper examines the relationship between central bank funding and credit risk-taking. Employing comprehensive bank-firm-level data from the German credit registry during 2009:Q1-2014:Q4, we find that borrowing from the central bank is associated with rebalancing of bank portfolios towards ex-ante riskier firms. We further establish that this relationship is associated with the ECB's maturity extensions and that the risk-taking sensitivity of banks borrowing from the ECB is independent of idiosyncratic bank characteristics. Finally, we highlight that these shifts in bank lending might lead to an ex-post deterioration of bank balance sheets, but increase firm-level investment and employment.
Subjects: 
Monetary Policy
LTRO
Bank Lending
Credit Risk-Taking
Real Effects
TFP Growth
JEL: 
E44
E52
G21
O40
ISBN: 
978-3-95729-734-1
Document Type: 
Working Paper

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