The risks of low interest rates

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dc.audiencePolicymakerseng
dc.audienceResearcherseng
dc.audienceStudentseng
dc.audienceTeacherseng
dc.coverage.sucursalBogotáeng
dc.creatorGambacorta, Leonardoeng
dc.date.accessioned2011-07-01T08:30:10Zeng
dc.date.available2011-07-01T08:30:10Zeng
dc.date.created2011-07-01eng
dc.date.issued2011-07eng
dc.description.abstractAt present, monetary policy in major advanced economies is highly accommodative; policy rates are close to zero and unconventional monetary measures have been sharply expanded. However, the recovery remains fragile and the policy discussion has shifted from exit timing to the possible distortions that a prolonged period of low interest rates may cause. In addressing the latter issue, this paper examines how far an exceptionally easy monetary policy may have unintended consequences for financial stability. The main channels by which monetary policy may influence risk-taking have been widely investigated (Borio and Zhu, 2008). There is, however, less evidence for the possible medium to long-term consequences of prolonged periods of policy rates close to zero and the extensive use of balance sheet policies (Borio and Disyatat, 2009; Del Negro, Ferrero and Kiyotaki, 2010). This paper suggests four possible ways by which a prolonged period of low interest rates could create distortions, by: a) inducing "evergreening policies" and postponing necessary adjustment in banks’ balance sheets; b) making bank profitability particularly vulnerable to future increases in interest rates; c) distorting the allocation of savings and the functioning of financial markets and d) influencing capital flows to emerging markets and creating pressure on exchange rates.eng
dc.format.extent19 páginas : gráficaseng
dc.format.mimetypePDFeng
dc.identifier.handlehttps://hdl.handle.net/20.500.12134/6427spa
dc.identifier.urihttps://repositorio.banrep.gov.co/handle/20.500.12134/6427
dc.language.isoengeng
dc.publisherBanco de la República de Colombiaeng
dc.relation.doihttps://doi.org/10.32468/Espe.6401spa
dc.relation.dotechttps://ideas.repec.org/a/col/000107/009440.htmlspa
dc.relation.ispartofArtículos de revistaeng
dc.relation.ispartofseriesRevista Ensayos Sobre Política Económicaeng
dc.relation.issn0120-4483eng
dc.relation.isversionofRevista Ensayos Sobre Política Económica; Vol. 29. No. 64, edición especial Riesgos en la industria bancaria. Julio, 2011. Pág.: 14-31.eng
dc.relation.repechttps://ideas.repec.org/a/bdr/ensayo/v29y2011i64p14-31.htmlspa
dc.rights.accessRightsOpen Accesseng
dc.rights.ccAtribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0eng
dc.rights.spaAcceso abiertospa
dc.rights.urihttps://creativecommons.org/licenses/by-nc-sa/4.0/eng
dc.source.bibliographicCitationAdrian, T., Shin, H. Financial Intermediaries and Monetary Economics, Federal Reserve Bank of New York Staff Reports, núm. 398, 2009.eng
dc.source.bibliographicCitationAlbertazzi, U.; Marchetti, D. Lending Supply and Unnatural Selection: An Analysis of Bank-firm Relationships in Italy After Lehman, Bank of Italy, Temi di discussione, forthcoming, 2010.eng
dc.source.bibliographicCitationAltunbas, Y.; Gambacorta, L.; Marqués-Ibañez, D. “Does Monetary Policy Affect Bank Risk-Taking?”, BIS Working Paper, núm. 298, March, 2009.eng
dc.source.handleRepecRePEc:col:000107:009440spa
dc.subjectPolítica monetariaeng
dc.subjectTasas de interéseng
dc.subjectRiesgoeng
dc.subject.jelE31 - Price Level; Inflation; Deflationeng
dc.subject.jelspaE31 - Nivel de precios; Inflación; Deflacióneng
dc.subject.keywordMonetary policyeng
dc.subject.keywordRiskseng
dc.subject.keywordInterest rateseng
dc.subject.lembPolítica monetaria -- Colombia -- 1992-2010eng
dc.subject.lembRiesgo (Tasas de interés) -- Colombia -- 1992-2010eng
dc.subject.lembTasas de interés -- Colombia -- 1992-2010eng
dc.titleThe risks of low interest rateseng
dc.typeArticleeng
dc.type.hasversionPublished Versioneng
dc.type.spaArtículoeng

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Año: 2011 - Vol. 29 - No. 64