Thursday, February 20, 2014

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[IWS] ADB: CAN LOW INTEREST RATES BE HARMFUL?: AN ASSESSMENT OF THE BANK RISK-TAKING CHANNEL IN ASIA [online 20 February 2014]

IWS Documented News Service

_______________________________

Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

________________________________________________________________________

 

Description

Asian Development Bank (ADB)

ADB Working Paper Series on Regional Economic Integration

No. 123 | January 2014

 

CAN LOW INTEREST RATES BE HARMFUL?: AN ASSESSMENT OF THE BANK RISK-TAKING CHANNEL IN ASIA [online 20 February 2014]

by  Ramayandi, Arief; Rawat, Umang; Tang, Hsiao Chink 

http://www.adb.org/publications/can-low-interest-rates-be-harmful-assessment-bank-risk-taking-channel-asia

or
http://www.adb.org/sites/default/files/pub/2014/reiwp-123-can-low-interest-rates-harmful.pdf
[full-text, 52 pages]

 

Events surrounding the global financial crisis have brought to light the potential role of monetary policy in precipitating the crisis. Numerous studies on advanced economies have documented a significant negative relationship between interest rates and bank risk-taking. This paper also finds the presence of the risk-taking channel based on a panel of publicly listed bank data in Asia. Using both annual and quarterly data, "too low" interest rates are found to lead to an increase in bank risk-taking.

 

Contents

• Abstract

• Introduction

• Literature: Theory and Evidence

• Model Specification

• Data and Estimation Issues

• Results

• Conclusion

• References

• Appendix

 

 

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

 




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