IMF paper explores link between low interest rates and bank risk-taking
An International Monetary Fund working paper, published yesterday, suggests that monetary policy "has a bearing on the riskiness of banks" as well as financial stability more generally.
The paper – Bank Leverage and Monetary Policy's Risk-Taking Channel: Evidence from the United States, by Giovanni Dell'Ariccia, Luc Laeven, and Gustavo Suarez – uses "confidential data" from Federal Reserve surveys on US banks' internal ratings of loans between 1997 and 2011.
The authors find that a low, short
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