Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224260
Authors: 
Bottero, Margherita
Minoiu, Camelia
Peydró, José-Luis
Polo, Andrea
Presbitero, Andrea
Sette, Enrico
Year of Publication: 
2020
Abstract: 
We show that negative interest rate policy (NIRP) has expansionary effects on bank credit supply and firm outcomes through a portfolio rebalancing channel. For identification, we exploit ECB's NIRP and credit register, firm- and bank-level datasets. NIRP affects relatively more banks with higher ex-ante net interbank positions or more liquid balance sheets. More exposed banks reduce liquid assets, expand credit supply to ex-ante riskier firms, and cut rates, inducing sizable firm-level real effects. By shifting down and flattening the yield curve, NIRP differs from rate cuts just above the zero-lower-bound. We find no evidence of a contractionary retail deposit channel.
Subjects: 
negative nominal interest rates
firm-level real effects
Eurozone crisis
portfolio rebalancing
liquidity management
JEL: 
G01
G21
G28
E52
E58
Document Type: 
Working Paper

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