ECB paper examines effects of real rates on banks’ fragility

The European Central Bank
Annabel Jeffery

A working paper published by the European Central Bank presents a model of how real interest rates affect the stability of banks.

In Real interest rates, bank borrowing and fragility, Toni Ahnert, Kartik Anand and Philipp Johann König extend the standard model of a bank subject to rollover risk. Their model makes both borrowing volume and the price of debt endogenous.

They say this allows them to split the effect of interest rate increases on the bank’s fragility “into distinct and opposing

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 or view our subscription options here:

You are currently unable to copy this content. Please contact 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: