Banks’ net worth impacts cost of credit, says ECB paper


A working paper, published by the European Central Bank (ECB) today (October 31), links banks' net worth to their ability to attract deposits and provide loans.

The author, Ansgar Rannenberg, creates a model where the ability of a bank to attract deposits and expand loans is positively related to its current net worth and its expected future earnings. If a shock lowers either of these values, individual banks will have to cut loan supply, which increases the cost of external finance for

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.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

If you already have an account, please sign in here.

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: