Monetary policy, ownership structure, and risk-taking at financial intermediaries
Date
2022-11-07
Authors
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Publisher
Wiley
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Article
ISSN
0732-8516
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Citation
Caselli G, Figueira C. (2023) Monetary policy, ownership structure, and risk-taking at financial intermediaries. Financial Review, Volume 58, Issue 1, February 2023, pp. 167-191
Abstract
This paper examines how ownership structure interacts with monetary policy in shaping financial intermediaries' appetite for risk. By constructing a large panel of banks across Western Europe, we provide evidence that differences in bank ownership influence the transmission of monetary policy via the risk-taking channel. While shareholder banks actively adjust the riskiness of their portfolios to changes in interest rates, stakeholder banks appear to be less responsive to such changes. These findings call for greater attention to the nature of bank ownership when setting monetary policy.
Description
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Keywords
bank ownership, financial crisis, macroprudential policy, monetary transmission mechanism, risk-taking channel, systemic risk
Rights
Attribution 4.0 International