Negative Interest Rates Policy and Banks' Risk-Taking: Empirical Evidence

Using a panel dataset of 9421 banks from 59 countries over the period 2009–2018 and a Difference- in-Differences estimator, this paper aims to assess the effects of negative interest rates on banks’ risk-taking. We find that banks’ risk-taking has been lower in countries where negative rates have been implemented. This effect depends on the characteristics of a country’s banking system, namely the level of capitalization and size