Unconventional monetary policy and bank risk taking

Matthys, Thomas; Meuleman, Elien; Vennet, Rudi Vander

doi:10.1016/j.jimonfin.2020.102233

Cited by 23 publications

(9 citation statements)

References 46 publications

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“…Despite the similarity with the Slovak economy, its banking market is relatively different, mainly due to our membership in the euro area, where we are negatively affected by negative interest rates and also the absence of a large part of foreign exchange income, which has a negative effect on profit [6]. This fact already favors the Czech banking market, not to mention the absence of the bank tax, which we have the highest in our country [22].…”

Section: Resultsmentioning

confidence: 99%

“…Furthermore, there are countries that have introduced a bank tax after us and still have it, but the amount that banks pay is lower in size than in Slovakia and there are countries where they had a bank tax but it has already been abolished, such as in Austria [27]. Or in some countries, the bank tax was transformed into contributions to the so-called single resolution fund, which is another novelty -in addition to contributions to the deposit protection fund, banks pay regular contributions to the resolution fund [22].…”

Section: Resultsmentioning

confidence: 99%

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Bank levy

Michalíková

2021

SHS Web of Conf.

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Research background: The bank levy was approved in 2011 and entered into force in 2012. Shortly after the economic crisis, Slovakia was not the only country to introduce it. Unlike other countries, the Slovak government did not have to help banks financially and then compensate for this help by increasing their taxation. The bank levy thus served mainly to improve the overall image of public finances in the country. Purpose of the article: The main goal of the article is to confirm the correctness of the abolition of the bank levy, which has distorted the management of banks in Slovakia for almost a whole decade. The abolition of the levy will contribute to greater stability of the banking sector, which will be helpful in the restart of the Slovak economy affected by the crisis caused by the covid-19 pandemic. Methods: Analysis of the legislation regulating the introduction of a bank levy in Slovakia, its development from the introduction of a bank levy to its abolition. Comparison of the expected benefits of this tool with reality. Findings & Value added: The article monitors the development of bank levies in Slovakia from its introduction to its abolition. The imposition of a bank levy resulted in additional taxation of the banking sector. The difference compared to other taxes was that the amount of the levy does not depend on the bank’s profit, but on the size of its liabilities.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Bank levy

Michalíková

2021

SHS Web of Conf.

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“…Then, the low policy interest rate and abnormal term structure have compressed the bank's net interest profit Molyneux et al, 2019). At present, unconventional monetary policy is becoming more frequent, Matthys et al (2020) use corporate syndicated loan data at the bank-firm level to analyze the bank risk-taking associated with unconventional monetary policy, showing that accommodating monetary conditions are associated with overall lower loan spreads.…”

Section: Monetary Policy Uncertainty and Bank Risk-takingmentioning

confidence: 99%

How Does Monetary Policy Uncertainty Influence Firms’ Dynamic Adjustment of Capital Structure

Yan

2022

Sage Open

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This study employs high-dimensional factors model to depict the development of monetary policy uncertainty (MPU) in China over the past decades and develops a logical analytical framework to analyze the effect of MPU on the dynamic adjustment of a firm’s capital structure through bank risk-taking channels. We investigate how MPU affects dynamic adjustment of a firm’s capital structure using a panel data set of China public manufacturers between 2007 and 2018 and find that the higher the MPU, the more detrimental it is to the dynamic adjustment of firm’s capital structure. Further, bank risk-taking plays the role of a financial stabilizer. In addition to the willingness to take risks in on-balance sheet operations and the scale of loans, the risk-taking of our banks may also be reflected in the adjustment of the off-balance-sheet shadow banking scale. This study also finds that in terms of on-balance sheet business, heighten MPU decreases the scale of bank credit and tightens loan approval criteria, in terms of off-balance sheet business, heighten MPU decreases the scale of shadow banking, thereby leading to a lower dynamic adjustment of firm’s capital structure. JEL classification C13, C36, E50, G21

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“…Although the empirical literature on the risktaking channel is expanding (Jiang & Yuan, 2022;Matthys et al, 2020), it is currently limited in some manners. Most importantly, previous results on the effects of monetary policy on different risk dimensions separately are not enough to draw a complete picture of the risk appetite and behavior of banks.…”

Section: Introductionmentioning

confidence: 99%

Monetary policy and risk of commercial banks in Vietnam

Nguyen,

Dang

2024

JEECAR

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This study investigates the bank risk-taking channel of monetary policy transmission by comprehensively analyzing multiple bank risk measurements amid monetary policy shocks in Vietnam. Using banking data for 2008–2021, a dynamic panel model is estimated to examine the risk exposure of 30 Vietnamese commercial banks. The paper employs the annual M2 money supply growth as a monetary policy variable, besides two policy interest rates established by the central bank. We find that an expansion of monetary policy benefits the quality of loan portfolios; however, reduced interest rates or an extended money supply increase insolvency risk. We also document that heightened economic growth corresponds to a reduced likelihood of credit and insolvency risks, while a surge in the inflation rate leads to an escalation in insolvency risk, manifested by a decline in the Z-score index. Overall, the findings on different risk dimensions in this paper are expected to draw a comprehensive picture of banks’ risk appetite and behavior in response to monetary changes.

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Unconventional monetary policy and bank risk taking

Cited by 23 publications

References 46 publications

Bank levy

Bank levy

How Does Monetary Policy Uncertainty Influence Firms’ Dynamic Adjustment of Capital Structure

Monetary policy and risk of commercial banks in Vietnam

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