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Risk-taking channel – does it operate in the Polish banking sector?


  • Tomasz Chmielewski

    (Narodowy Bank Polski)

  • Tomasz Łyziak

    (Narodowy Bank Polski)

  • Ewa Stanisławska

    (Narodowy Bank Polski)


The aim of this paper is to test whether the risk-taking channel of monetary policy transmission mechanism is active in Poland, an emerging market economy. Based on confidential bank-level data we construct novel measures of risk taken by banks. These measures do not require access to loan-level data, nor rely on data from surveys among credit officers. We find some evidence of the risk-taking behaviour of Polish banks, however, only in the segment of large loans to non-financial corporations we are able to conclude that increased risk of new loans represent supply-side phenomenon. We show that the loosening of monetary policy has different effects depending on the initial level of interest rates – the lower the interest rate is, the larger the increase in risk that is generated by the lowering of interest rate. This response is different across banks, with stronger reaction displayed by banks that are large, with low liquidity and with deposits being the most important funding source. Our results contribute to ongoing discussion on consequences of conducting monetary policy in the low interest rate environment as currently observed in many advanced and emerging economies.

Suggested Citation

  • Tomasz Chmielewski & Tomasz Łyziak & Ewa Stanisławska, 2019. "Risk-taking channel – does it operate in the Polish banking sector?," NBP Working Papers 305, Narodowy Bank Polski, Economic Research Department.
  • Handle: RePEc:nbp:nbpmis:305
    Note: We would like to thank Natalia Nehrebecka, Dobromił Serwa and the participants of the CESEE Research Workshop (May 2018, Novy Smokovec, Slovakia), research seminar at Narodowy Bank Polski (May 2018, Warsaw, Poland) and the 7th NBP Summer Workshop (June 2018, Warsaw, Poland) for useful comments.

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    References listed on IDEAS

    1. De Vos, Ignace & Everaert, Gerdie & Ruyssen, Ilse, 2015. "Bootstrap-based bias correction and inference for dynamic panels with fixed effects," Stata Journal, StataCorp LP, vol. 15(4).
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    More about this item


    risk-taking channel; monetary policy; low interest rates;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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