Search results for "Negative interest rates"
showing 3 items of 3 documents
Impacts of sovereign risk premium on bank profitability: Evidence from euro area
2021
We analyse the effects of low and negative interest rates and sovereign risk premium on bank profitability among 154 Eurozone banks during the period 2005–2019. In contrast to some of the results in the previous literature, we find that the euro area banks have not suffered too much from the extremely low and negative interest rate era regarding their net interest margins. However, the overall profitability has lowered clearly during the sample period, and the sovereign risk premium has a robust negative effect on all the overall profitability measures, both with risk-adjustment and without it, but it seems to have an increasing effect on the degree of wholesale funding and loan loss provis…
Keep the faith in banking : New evidence for the effects of negative interest rates based on the case of Finnish cooperative banks
2021
This paper analyses the profitability of Finnish cooperative banks during the period of negative nominal interest rates. Contrary to expectations, the continuous decline in money market interest rates between 2009 and 2014, and the following negative rate era, did not have adverse effects on the profitability of banks at the beginning of negative interest rate period. Based on especially using a risk-adjusted measure for bank profitability, these results contrast with previous findings. In our findings, the increasing wholesale funding (WSF) ratio seems to be an important factor. However, after 2017 the banks have not been able to improve especially their risk-adjusted profitability so stro…
Remarks on negative interest rates
2016
Negative nominal interest rates have been observed in several segments of financial markets. Being only partly a result of supply and demand and mainly enforced by the central banks, negative interest rates are getting more and more popular. While it is relatively easy to identify the reasons for this quite strange phenomenon, the con-sequences, especially the long-term consequences, are not too clear for both scientists and ordinary observers. This paper is an attempt to formulate some remarks on causes, evidence, and possible effects of negative interest rates. A warning is issued, with respect to monetary policy and financial stability.