Negative Interest Rate Risk. Atavism or Normalization of Central Banks’ Monetary Policy

Pyka, Irena; Nocoń, Aleksandra

doi:10.18778/0208-6018.342.05

Cited by 3 publications

(3 citation statements)

References 20 publications

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“…In this regard, it is difficult to make good predictions. After the global financial crisis, interest rates on the money market remain low [86,87]. Their long-awaited increase also did not take place as a result of the coronavirus pandemic.…”

Section: Literature Reviewmentioning

confidence: 99%

Responsible Lending Policy of Green Investments in the Energy Sector in Poland

Pyka

Nocoń

2021

Energies

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The paper concerns the issue of responsible involvement of commercial banks in Poland in green financing of the energy sector. The main reason for undertaking this topic is the observed increased interest of domestic banks in green financing of investments on the energy market in Poland. Therefore, the main objective are to explore the determinants of changes in the level and structure of bank loans under the influence of green investments in the energy sector in Poland. The article verifies the research hypothesis which assumes that an increase in financing green investments by bank loans in the energy market in Poland requires strengthening the synergy of responsible financing of sustainable development of the economy. For this purpose, a two-stage concept of the empirical research was adopted. On the first stage, questionnaire surveys were conducted among the largest Polish commercial banks to examine the respondents’ acceptance degree of the concept of sustainable financing and greening the loan portfolio. On the second stage, case studies were analyzed along with the analysis of selected secondary quantitative data. It was proven that commercial banks in Poland increase their commitment to sustainable financing, which is observed in the sectorally progressing process of “greening” the credit offer. There is also a noticeable change in their approach to social responsibility, especially in the context of the energy market, where financing of traditional, ecologically harmful projects is still dominant. However, this trend is slowly being reversed, towards supporting investments in the area of modern, environmentally-friendly energy solutions. However, “greening” of loan portfolios in the native banking sector requires a responsible lending policy based on various complex business decisions. Increasing their pro-ecological awareness of financing the economy is only a prerequisite, albeit inadequate, of further energy transformation in Poland.

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Section: Literature Reviewmentioning

confidence: 99%

Responsible Lending Policy of Green Investments in the Energy Sector in Poland

Pyka

Nocoń

2021

Energies

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“…It soared to its peak of EUR 1.09925 in January 2015. NIR should prevent this appreciation (Pyka and Nocon 2019). The NIR was successful from that point of view, and the Swiss franc was depreciated compared both to EUR and USD after the introduction of NIR (see Figure 2, whilst other details can be also found in (Ziegler-Hasiba and Turnes 2018)).…”

Section: Results For Switzerlandmentioning

confidence: 90%

“…The main interest rate then equaled 0 until the beginning of 2022, when it gradually started to grow. The main reason for implementing NIR was to counteract excessively low inflation (Pyka and Nocon 2019). Its values are mentioned in Table 4 which shows the inflation increased (albeit small) after the NIR introduction.…”

Section: Results For Swedenmentioning

confidence: 99%

Negative Interest Rates and Its Impact on GDP, FDI and Banks’ Financial Performance: The Cases of Switzerland and Sweden

Wawrosz,

Traksel

2023

IJFS

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The article deals with the issue of how negative interest rate policies, introduced in the second decade of the 21st century in some countries, affect certain macroeconomic indicators and bank performance. We concentrate specifically on Switzerland and Sweden. We use correlation analysis to reveal the relationship between interest rates and GDP, the level of foreign direct investment (FDI) and some indicators of banks’ performance. We found that negative interest rates (NIRs) are strongly correlated with the level of GDP in both Switzerland and Sweden but that they do not affect their FDI. The share of banks´ deposits in GDP is also strongly correlated with NIR. Other indicators of bank performance do not show a strong correlation for both countries. Our evidence is consistent with NIR not being associated with undesirable effects concerning economic growth and bank performance in Switzerland and Sweden. The value of FDI depends on many factors—mainly on the attractiveness of a country for foreign investors in terms of its political and economic stability and by general conditions for business operation.

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Bank Risk Capital and Its Effectiveness in Selected Euro Area Banking Sectors

Pyka

Nocoń

2021

JRFM

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Risk capital or capital at risk (CaR) refers to the amount of capital set aside and maintained by banks to cover different types of risk. For banks, it is used as a buffer against claims or expenses in the event that ordinary capital is not enough to cover them. Thereby, risk capital can also be recognized as risk-bearing capital or surplus funds. Risk capital may generate very high costs, but on the other hand it protects against insolvency. That’s why a bank needs to find the ‘Gold mean’—the optimal value of risk capital that will not lower its efficiency, but still ensure financial security. The main objective of the study is identification of interdependencies between bank risk capital and effectiveness of the aggregated Eurozone banking sector and selected national banking sectors of the euro area. The paper tries to answer the research question whether the risk capital supports or lowers banks’ operational effectiveness. The adopted research hypothesis stated that there is a positive correlation between profitability and size of bank risk capital. To verify the hypothesis regression models were used. The results indicate that the size and structure of bank capital impact on the credit institutions’ effectiveness in the analyzed banking sectors, however with different intensity. Thereby, the article fulfils a research gap in the field of research studies that take into account how capital at risk and specific capital adequacy regulations may impact on a bank’s efficiency.

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Negative Interest Rate Risk. Atavism or Normalization of Central Banks’ Monetary Policy

Cited by 3 publications

References 20 publications

Responsible Lending Policy of Green Investments in the Energy Sector in Poland

Responsible Lending Policy of Green Investments in the Energy Sector in Poland

Negative Interest Rates and Its Impact on GDP, FDI and Banks’ Financial Performance: The Cases of Switzerland and Sweden

Bank Risk Capital and Its Effectiveness in Selected Euro Area Banking Sectors

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