Focal Interest
Focal Interest
AI Summary of Peer-Reviewed Research

This page presents an AI-generated summary of a published research paper. The original authors did not write or review this article. [See full disclosure ↓]

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Negative interest rates linked to lower loan loss provisioning

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Research area:Economics, Econometrics and FinanceFinanceMonetary Policy and Economic Impact

What the study found

Banks in countries that adopted negative interest rate policy showed a contraction in loan loss provisioning, according to this study.

Why the authors say this matters

The authors conclude that the findings indicate the negative interest rate policy effect depends on country- and bank-specific characteristics, including inflation, bank size, and bank specialisation.

What the researchers tested

The researchers examined the impact of negative interest rate policy on bank credit risk-taking using a triple difference methodology. They analyzed data from 1,958 banks across 29 OECD member countries from 2011 to 2017, and they also used a quadruple difference model and propensity score matching to check robustness.

What worked and what didn't

The triple difference model found that banks in countries adopting negative interest rate policy exhibited a contraction in loan loss provisioning. The study also found that the effect depended on inflation, bank size, and bank specialisation. The abstract does not report results from the quadruple difference model or propensity score matching beyond their use as robustness checks.

What to keep in mind

The abstract does not describe additional limitations beyond the study period, country sample, and banking sample used. It also does not provide detailed results from the robustness checks.

Key points

  • The study links negative interest rate policy with a contraction in loan loss provisioning.
  • The effect is reported to depend on inflation, bank size, and bank specialisation.
  • The analysis used 1,958 banks from 29 OECD countries between 2011 and 2017.
  • The researchers used triple difference methods and checked robustness with quadruple difference and propensity score matching.

Disclosure

Research title:
Negative interest rates linked to lower loan loss provisioning
Authors:
Zixuan Dai, Lei Xu, Chandra Krishnamurti, Zenghua Lu
Institutions:
South China University of Technology, The University of Adelaide
Publication date:
2026-04-02
DOI:
10.1177/03128962261428501
OpenAlex record:
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AI provenance: This post was generated by OpenAI. The original authors did not write or review this post.

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