Monetary Policy and Bank Excessive Risk-Taking
Monetary Policy and Bank Excessive Risk-Taking
Author(s): Taha Zaghdoudi, Samir MaktoufSubject(s): Economy
Published by: Editura Universitară Danubius
Keywords: Monetary policy; non-performing loans; fully modified ols; panel GMM
Summary/Abstract: The aim of this paper is to investigate the relationship between monetary policy and bank excessive risk-taking for a panel of 22 countries over the period 1990- 2014. The sample covers countries from Latin America, OECD and South East Asia. By performing panel cointegration and panel GMM models, results indicate that the adoption of an expansionary monetary policy through high money supply and low interest rates increases non-performing loans. However, a restrictive monetary policy with high interest rates attracts riskier investors.
Journal: Acta Universitatis Danubius. Œconomica
- Issue Year: 13/2017
- Issue No: 2
- Page Range: 157-173
- Page Count: 17
- Language: English