Publication at Faculty of Mathematics and Physics, Faculty of Social Sciences, Centre for Economic Research and Graduate Education |
2012
Abstract
This article examines the impact of monetary conditions on the risk-taking behaviour of banks in the Czech Republic. The analysis indicates that expansionary monetary conditions promote risk-taking among banks, but a lower interest rate during the life of a loan reduces its riskiness.
The results suggest that banks' and borrowers' characteristics play a role in explaining the association between banks' appetite for risk and the short-term interest rate.