Negative rates not to blame for low eurozone bank profitability – Fed paper

US dollars and euros

Bank-specific factors are likely to have a much greater influence on eurozone bank profits than low and negative rates, research published by the Federal Reserve finds.

Nicholas Coleman and Viktors Stebunovs examine whether low and negative rates are the dominant factor in the poor profitability of European banks. They estimate the direct effect of the interest rate environment from 2006–18 on profitability and compare whether banks would have done better operating in the US environment. 

They

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