Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278366 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2790
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper investigates to what extent the introduction of negative monetary policy rates altered the competitive behaviour in the euro area banking sector. Specifically, it analyses the effect that negative policy rates had on euro area banks' market power in comparison to banks that have not been subject to negative rates. The analysis, considering a sample of 4,223 banks over the period 2011-2018 and relying on a difference-in-differences methodology, finds that negative monetary policy rates led to an increase in euro area banks' market power. Furthermore, it shows that, during the negative interest rate policy period, change in banks' competitive behaviour affected the bank lending channel and discouraged banks from taking excessive risks.
Subjects: 
NIRP
Lerner index
Bank lending channel
Bank Stability
DiD
JEL: 
44
E52
E58
G20
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5986-5
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.