What the study found
The study found that banks in countries adopting negative interest rate policy showed a contraction in loan loss provisioning. It also found that this negative interest rate policy effect depends on country- and bank-specific characteristics, including inflation, bank size, and bank specialisation.
Why the authors say this matters
The authors do not state a broader practical implication in the abstract beyond examining how negative interest rate policy relates to bank credit risk-taking. They present the findings as relevant for understanding how the policy interacts with bank and country conditions.
What the researchers tested
The researchers studied 1,958 banks across 29 OECD countries from 2011 to 2017. They used a triple difference method, and they also used a quadruple difference model and propensity score matching to check the robustness of the triple difference results.
What worked and what didn't
The triple difference analysis showed a contraction in loan loss provisioning in countries that adopted negative interest rate policy. The additional methods, quadruple difference and propensity score matching, were used to test robustness, but the abstract does not give separate detailed results for those checks.
What to keep in mind
The abstract does not provide detailed effect sizes or explanation of the mechanisms behind the findings. It also does not describe limitations beyond noting that the effect varies with inflation, bank size, and bank specialisation.
Key points
- Banks in negative interest rate policy countries showed lower loan loss provisioning.
- The effect varied with inflation, bank size, and bank specialisation.
- The study covered 1,958 banks in 29 OECD countries from 2011 to 2017.
- The authors used triple difference analysis and checked robustness with quadruple difference and propensity score matching.
Disclosure
- Research title:
- Negative interest rates are linked to lower bank loan loss provisioning
- Authors:
- Zixuan Dai, Lei Xu, Chandra Krishnamurti, Zenghua Lu
- Institutions:
- South China University of Technology, The University of Adelaide, The University of Adelaide, The University of Adelaide
- Publication date:
- 2026-04-02
- OpenAlex record:
- View
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