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Monetary Policy and Bank Excessive Risk-Taking

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  • Taha Zaghdoudi

    (University of Jendouba)

  • Samir Maktouf

    (University of Tunis El Manar)

Abstract

The aim of this paper is to investigate the relationship between monetary policy and bank excessive risk-taking for a panel of 22 countries over the period 1990- 2014. The sample covers countries from Latin America, OECD and South East Asia. By performing panel cointegration and panel GMM models, results indicate that the adoption of an expansionary monetary policy through high money supply and low interest rates increases non-performing loans. However, a restrictive monetary policy with high interest rates attracts riskier investors.

Suggested Citation

  • Taha Zaghdoudi & Samir Maktouf, 2017. "Monetary Policy and Bank Excessive Risk-Taking," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(2), pages 157-173, April.
    • Handle: RePEc:dug:actaec:y:2017:i:2:p:157-173
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/3909/3966
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