ECB paper investigates policy effect on bank risk-taking


A working paper, published by the European Central Bank (ECB) on August 14, models the effect of policy on bank risk-taking, finding that conflicting impacts of monetary and macro-prudential policy make it impossible for regulators to set an optimal capital requirement.

Authors Itai Agur and Maria Demertzis design a banking system model whereby a rise in interest rates lowers risk taking by making credit more expensive, but raises risk taking by lowering profitability, which the authors say

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: