Bank of Italy paper looks at impact of long-term rates

The Bank of Italy

Long-term interest rates have had far greater influence on Italian banks’ appetite for credit risk than shorter-term rates, a working paper published by the Bank of Italy finds.

In Credit risk-taking and maturity mismatch: the role of the yield curve, Giuseppe Ferrero, Andrea Nobili and Gabriele Sene use a confidential dataset on new loans by Italian banks to non-financial firms.

The authors match this information to an ex-ante measure of borrowers’ creditworthiness, to gauge how Italian banks

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