Autori
Gambacorta, Leonardo
Borio, Claudio
Brei, Michael

Titolo
Bank intermediation activity in a low-interest-rate environment
Periodico
Economic notes
Anno: 2020 - Volume: 49 - Fascicolo: 2 - Pagina iniziale: 12164 - Pagina finale: 12164

This paper investigates how a prolonged period of low-interest rates affects bank intermediation activity. We use data for 113 large international banks headquartered in 14 major advanced economies during the period 1994–2015. We find that low-interest rates induce banks to shift their activities from interest-generating to fee-related and trading activities. This rebalancing is stronger for low capitalised banks. Banks also moderately adjust their funding structure, away from short-term market funding towards deposits. We observe a concomitant decline in the risk-weighted asset ratio and a reduction in loan-loss provisions, which is consistent with signs of evergreening



SICI: 0391-5026(2020)49:2<12164:BIAIAL>2.0.ZU;2-H

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