Publication detail
Monetary Conditions and Banks’ Behaviour in the Czech Republic
| Author(s): | Doc. PhDr. Adam Geršl Ph.D., Dorota Kowalczyk, Steven Ongena, José-Luis Peydró Alcalde PhDr. Ing. Petr Jakubík Ph.D., Dorota Kowalczyk, Steven Ongena, José-Luis Peydró Alcalde |
|---|---|
| Type: | Articles in refereed journals |
| Year: | 2012 |
| Number: | 0 |
| ISSN / ISBN: | |
| Published in: | CNB WP 2/2012 |
| Publishing place: | |
| Keywords: | Business cycle, credit risk, financial stability, lending standards, liquidity risk, monetary policy, policy interest rate, risk-taking |
| JEL codes: | |
| Suggested Citation: | |
| Abstract: | This paper examines the impact of monetary conditions on the risk-taking behaviour of banks in the Czech Republic by analysing the comprehensive credit register of the Czech National Bank. Our duration analysis indicates that expansionary monetary conditions promote risk-taking among banks. At the same time, a lower interest rate during the life of a loan reduces its riskiness. While seeking to assess the association between banks’ appetite for risk and the short-term interest rate we answer a set of questions related to the difference between higher liquidity versus credit risk and the effect of the policy rate conditioned on bank and borrower characteristics. |