Joint research unit 7235

Lost in Negative Territory? Search for Yield!

Jean-Guillaume Sahuc, Mattia Girotti, Guillaume Horny

We study how negative interest rate policy (NIRP) affects banks’ loan pricing. Using contract-level data from France, we show that NIRP affects bank lending rates to firms through a portfolio rebalancing channel: banks holding a one standard deviation more of cash and central bank reserves offer a 8.6 basis points lower loan rate after NIRP is introduced. The impact concentrates on medium-term loans (with maturity comprised between three and six years) but not on loans to risky firms, indicating that banks conduct a search for yield focused on term spreads. These findings suggest that NIRP complements quantitative easing policies.

AGENDA

Thursday 1 September 2022

Professeurs invités

Stéphane Méchoulan

Monday 12 September 2022

Law, Institutions and Economics in Nanterre (LIEN)

Stéphane Méchoulan (Dalhousie U)

En salle 614 et en distanciel

Revisiting the effects of abortion legalization

Monday 12 September 2022

Revisiting the effects of abortion legalization

Stéphane Méchoulan (Dalhousie U)

En salle 614 et en distanciel

Revisiting the effects of abortion legalization

Wednesday 14 September 2022

Colloques et Workshops

Roundtable on Gender-based violence in South Africa

Wednesday 14 September 2022

Colloques et Workshops

Roundtable on Gender-based violence in South Africa

Friday 16 September 2022

Colloques et Workshops

Tables rondes de macro-finance contemporaine

Friday 16 September 2022

Colloques et Workshops

Tables rondes de macro-finance contemporaine

Monday 19 September 2022

Colloques et Workshops

Valeur, valeurs

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