Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264834 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 242
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
Evidence on the effects of negative interest rates on bank lending is inconclusive so far. By applying a difference-in-difference estimation using granular loan level data with a large coverage from Austria, I show, contrary to some previous ndings, that the introduction of a negative deposit facility rate by the European Central Bank led to an increased credit supply by high-deposit nanced banks. Given the importance of relationship banking, the extended credit is granted mainly by smaller banks and via existing credit relationships to firms and households. Banks lend more often to indebted customers and to clients with higher probabilities of default, confirming the previous found increased risk-taking behavior in negative interest rate environment.
Subjects: 
Monetary policy transmission
negative interest rate policy
portfolio rebalancing channel
bank lending
nancial stability
JEL: 
E44
E51
E52
E58
G21
Document Type: 
Working Paper

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