News Finanzmarktregulierung & Gesetzgebung

Federal Reserve Releases Discussion Paper on Bank Market Power

The Federal Reserve Divisions of Research & Statistics and Monetary Affairs released discussion paper that investigates the risk channel of monetary policy through banks' lending standards. The authors show that, in partial equilibrium, a bank prefers a higher leverage ratio of borrowers, when the profitability of lending increases, e.g. after a monetary expansion.

To the discussion paper