Is there a zero lower bound? The effects of negative policy rates on banks and firms
Carlo Altavilla,Mariassunta Giannetti,Carlo Altavilla,Lorenzo Burlon,Mariassunta Giannetti,Mariassunta Giannetti,Sarah Holton +6 more
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TLDR
This article showed that sound banks pass negative rates on to their corporate depositors and that pass-through is not impaired when policy rates move into negative territory, and that firms with ex ante high liquidity invest more than comparable firms that are not charged negative rates and increase their liquid holdings less.About:
This article is published in Journal of Financial Economics.The article was published on 2021-07-01 and is currently open access. It has received 44 citations till now. The article focuses on the topics: Market liquidity & Zero lower bound.read more
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A CENTRAL BANK DIGITAL CURRENCY IN A HETEROGENEOUS MONETARY UNION: Managing the Effects on the Bank Lending Channel
TL;DR: In this paper , the authors investigated and clarified the conditions under which a digital euro could be introduced on a large scale without leading to bank disintermediation or a credit crunch.
Liquidity, Liquidity Everywhere, Not a Drop to Use - Why Flooding Banks with Central Bank Reserves May Not Expand Liquidity
TL;DR: Rajan et al. as discussed by the authors investigated the monetary effects of reserve expansion on economic activity and found that reserve expansion may attenuate any positive monetary effects on economic growth. But reserve expansion does not necessarily increase the availability of liquidity, since banks typically also write other claims on reserve holdings.
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The Augmented Bank Balance-Sheet Channel of Monetary Policy
Christian Bittner,Diana Carina Ribiero Guimaraes Bonfim,Florian Heider,Farzad Saidi,Glenn Schepens,Carla Sofia Caeiro Soares +5 more
TL;DR: In this article , the authors studied how banks' balance sheets and funding costs interact in the transmission of monetary-policy rates to banks' credit supply to firms, and provided a simple model of an augmented bank balance-sheet channel where in addition to costly external financing, there is screening of borrowers and a ZLB on retail deposit rates.
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Central Bank Digital Currency and Bank Intermediation
Ramón Adalid,Álvaro Álvarez-Blázquez,Katrin Assenmacher,Lorenzo Burlón,Maria Dimou,Carolina López-Quiles,Natalia Martín Fuentes,Barbara Meller,Manuel Illueca Muñoz,Petya Radulova,Costanza Rodriguez d'Acri,Tamarah Shakir,Gabriela Šílová,Oscar Soons,Alexia Ventula Veghazy +14 more
TL;DR: In this paper , the authors explore a set of analytical exercises that can offer insights into the consequences of a digital euro for bank intermediation in the euro area. But they focus on the negative impact of the digital currency on bank lending and resilience.
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A game between central banks and households involving central bank digital currencies, other digital currencies and negative interest rates
Guizhou Wang,Kjell Hausken +1 more
TL;DR: In this paper , a game between a central bank and a representative household choosing to consume, hold CBDC, or hold non-CBDC is analyzed, and the results are determined analytically and illustrated numerically where each of nine parameter values is varied relative to a benchmark.
References
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General Theory of Employment, Interest and Money
TL;DR: In this article, a general theory of the rate of interest was proposed, and the subjective and objective factors of the propensity to consume and the multiplier were considered, as well as the psychological and business incentives to invest.
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The General Theory of Employment, Interest and Money.
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The Federal Funds Rate and the Channels of Monetary Transnission
TL;DR: The authors showed that the interest rate on the Federal Funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates, and argued that the reason for this forecasting is that the funds rate sensitively records shocks to the supply of (not the demand for) bank reserves.
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The determinants and implications of corporate cash holdings
TL;DR: The authors examine the determinants and implications of holdings of cash and marketable securities by publicly traded U.S. firms in the 1971-1994 period and find evidence supportive of a static tradeoff model of cash holdings.
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The Determinants and Implications of Corporate Cash Holdings
TL;DR: The authors examined the determinants and implications of holdings of cash and marketable securities by publicly traded U.S. firms in the 1971-1994 period and found that firms with strong growth opportunities and riskier cash flows hold relatively high ratios of cash to total assets.