Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248908 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9363
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In the presence of negative monetary-policy rates and a zero lower bound on deposit rates, banks that are more exposed to central banks’ asset-purchase programs reduce their lending to the real economy by more than their counterparts. When banks face a lower bound on customer deposit rates, an asset swap between securities and reserves reduces banks’ net worth as the cost of holding reserves cannot be matched with a reduction in their cost of funding. Exploiting euro-area syndicated lending data and the German credit registry, we provide evidence that deposit-reliant banks with relatively higher funding costs and greater exposure to large-scale asset purchases reduce corporate lending relatively more, have lower stock returns, and rebalance their interbank lending from safe to risky countries.
Subjects: 
negative interest rates
quantitative easing
unconventional monetary policy
bank lending channel
JEL: 
E52
E58
G21
Document Type: 
Working Paper
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