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Does Prolonged Monetary Policy Easing Increase Financial Vulnerability?. [electronic resource]

Author/Creator:
Cecchetti, Stephen
Publication:
Washington, D.C. : International Monetary Fund, 2017.
Format/Description:
Government document
Book
1 online resource (31 p.)
Series:
IMF eLibrary
IMF Working Papers
IMF Working Papers
Status/Location:
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Summary:
Using firm-level data for approximately 1,000 bank and nonbank financial institutions in 22 countries over the past 15 years we study the impact of prolonged monetary policy easing on risk-taking behavior. We find that the leverage ratio, as well as other measures of firm-level vulnerability, increases for banks and nonbanks as domestic monetary policy easing persists. Cross-border effects are also notable. We find effects of roughly similar magnitude on foreign financial sector firms when the U.S. eases policy. Results appear robust to a variety of specifications, and to be non-linear, with risk-taking behavior rising most quickly at the onset of monetary policy easing.
Notes:
Part of the IMF eLibrary collection.
Description based on print version record.
Contributor:
Cecchetti, Stephen
Other format:
Print Version: Cecchetti, Stephen Does Prolonged Monetary Policy Easing Increase Financial Vulnerability?
ISBN:
147558864X
9781475588644
ISSN:
1018-5941
Publisher Number:
10.5089/9781475588644.001 doi
Access Restriction:
Restricted for use by site license.