Capital Regulation, Risk-Taking and Monetary Policy: A Missing Link in the Transmission Mechanism?

By C. Borio, Haibin. 2008

1,066 citations recorded by the source corpus.

Subfields: Finance

View Paper: https://www.semanticscholar.org/paper/80f3cc27253e0a0a7a9ed725de62260fd2344526

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Citations in the corpus

Unconventional monetary policies: a re-appraisal (2018, neutral): “…may be induced to shift into riskier assets – an aspect of the socalled “risk-taking channel”.7,8 7 For an introduction to the risk-taking channel, see Borio and Zhu (2012); for further elaboration or examples, see, in particular, Rajan (2005); for its operation in the context of exchange rates,…”
Monetary policy and bank lending in a low interest rate environment: Diminishing effectiveness? (2017, positive): “This has given support to a different dimension of the monetary transmission mechanism: the so-called risk-taking channel (Adrian and Shin (2010), Borio and Zhu (2012)).”
Financial (In)Stability, Supervision and Liquidity Injections: A Dynamic General Equilibrium Approach (2008, positive): “As underlined in Borio and Zhu (2007), this is the only framework in which dynamic interactions 1This literature review is far from being exhaustive and we concentrate on dynamic general equilibrium models.”
Global liquidity and cross-border bank flows (2017, neutral): “6 See Altunbas et al. (2014), Borio and Zhu (2012), Jimenez et al. (2014), Bruno and Shin (2015b) for a discussion of the link between monetary policy and bank risk-taking.”
Corruption and bank risk-taking: Evidence from emerging economies (2015, positive): “Argued by Borio and Zhu (2012), Dell'Ariccia et al. (2013), Delis and Kouretas (2011) and many others, expansionary monetary policy may cause a bank more risk-prone via two main mechanisms: first, lower interest rates can boost the value of collateral which in turn reduces banks’ perception to risks”
Bank profitability and risk-taking under low interest rates (2017, positive): “In combination with the lower lending standards, as found by Maddaloni & Peydró (2011), and higher risk-taking on new loans through the risk-taking channels, see Borio & Zhu (2008), this might be a worrying development.”
Capital Flows and Financial Stability: Monetary Policy and Macroprudential Responses (2011, neutral): “PtNW D t (k) = QtK D t+1(k)−D t+1(k), (13) where DF t+1and D D t+1 denote foreign currency denominated debt and domestic currency denominated debt respectively.”
Macroprudential policy and bank risk (2018, neutral): “See also Borio and Zhu (2014).”
Global Imbalances and the Financial Crisis: Link or No Link? (2011, positive): “On this, see, for instance, Borio and Zhu (2008), Rajan (2005), Adrian and Shin (2009), Fahri and Tirole (2009) and, for empirical evidence, the studies mentioned in Gambacorta (2009).”
The role of banks in the transmission of monetary policy (2012, positive): “In fact, recent studies have emphasized a risk-taking channel for monetary policy that places more emphasis on the willingness of banks to expand their balance sheet (for example, Borio and Zhu 2012; and Adrian and Shin 2011).”
Optimal Monetary and Prudential Policies (2017, neutral): “A producer i using technology R chooses xt (i) to maximize (1− φt)βEt { λt+1 λt [ qt+1 exp ( η t ) xt (i)− 1 +R t Πt+1 l t (i) ]∣∣∣∣ θt = 1} subject to (7) and (9), where Et { .”
Does Monetary Policy Affect Bank Risk-Taking? (2010, neutral): “First, low interest rates affect valuations, incomes and cash flows, which in turn can influence how banks measure risk (Adrian and Shin, 2009a; 2009b; Borio and Zhu, 2008).”
The Bank Lending Channel: Lessons from the Crisis (2011, neutral): “3 See amongst others, Rajan (2005) and Borio and Zhu (2008).”
The Financial Cycle and Macroeconomics: What Have We Learnt? (2014, positive): “A second step is to allow for state-varying risk tolerance, ie for attitudes towards risk that vary with the state of the economy, wealth and balance sheets (eg, Borio and Zhu (2011)).”
Necessity As the Mother of Invention: Monetary Policy after the Crisis (2017, positive): “…authors have argued that monetary policy played an important role in creating the crisis by keeping interest rates too low for too long (cf. Taylor, 2009), which fueled an asset price boom and spurred financial intermediaries to increase leverage and take on excessive risks (Borio and Zhu, 2008).”