{"title":"Tiers of joy? Reserve tiering and bank behavior in a negative-rate environment","authors":"","doi":"10.1016/j.jmoneco.2024.103614","DOIUrl":null,"url":null,"abstract":"<div><div>Negative interest rate regimes typically involve reserve tiering to exempt a portion of bank reserves from negative rates. We study the effects on bank behavior of a large and unanticipated change in reserve tiering by the Swiss National Bank that generated substantial variation across banks and was not related to other events. We find a sizable reallocation of liquidity and deposits within the banking system. Higher exemptions reduce the pass-through of negative rates to deposit rates, especially at retail banks with limited access to the interbank market. Effects on lending are moderate and suggest that higher profitability lessens pressure to reach for yield. Our results are informative about the transmission channels of monetary policy through the banking sector more broadly. We discuss how effects of reserve tiering may differ from effects of changes in interest rates, emphasizing that reserve tiering affects the economy through a narrower set of channels.</div></div>","PeriodicalId":48407,"journal":{"name":"Journal of Monetary Economics","volume":"148 ","pages":"Article 103614"},"PeriodicalIF":4.3000,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Monetary Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0304393224000679","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Negative interest rate regimes typically involve reserve tiering to exempt a portion of bank reserves from negative rates. We study the effects on bank behavior of a large and unanticipated change in reserve tiering by the Swiss National Bank that generated substantial variation across banks and was not related to other events. We find a sizable reallocation of liquidity and deposits within the banking system. Higher exemptions reduce the pass-through of negative rates to deposit rates, especially at retail banks with limited access to the interbank market. Effects on lending are moderate and suggest that higher profitability lessens pressure to reach for yield. Our results are informative about the transmission channels of monetary policy through the banking sector more broadly. We discuss how effects of reserve tiering may differ from effects of changes in interest rates, emphasizing that reserve tiering affects the economy through a narrower set of channels.
期刊介绍：
The profession has witnessed over the past twenty years a remarkable expansion of research activities bearing on problems in the broader field of monetary economics. The strong interest in monetary analysis has been increasingly matched in recent years by the growing attention to the working and structure of financial institutions. The role of various institutional arrangements, the consequences of specific changes in banking structure and the welfare aspects of structural policies have attracted an increasing interest in the profession. There has also been a growing attention to the operation of credit markets and to various aspects in the behavior of rates of return on assets. The Journal of Monetary Economics provides a specialized forum for the publication of this research.
京公网安备 11010802042870号
京ICP备2023020795号-1
分享
求助内容：
应助结果提醒方式：
扫码关注我们
