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| Emmanuel C Mamatzakis, C Staikouras and C Triantopoulos |
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| ''A monetary policy perspective of threshold effects in interest rates in the Euro-area.'' |
| ( 2025, Vol. 45 No.3 ) |
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| This paper examines the impact of euro-area monetary policy on the banking industry. We provide a dynamic threshold panel model that endogenously identifies the low threshold of monetary policy rate. And we also provide insights of the long vs the short run impact of unconventional monetary policy on bank level resilience. Results show that there is a negative relationship between low rates and bank risk. Dynamic threshold methodology identifies threshold effects and two regimes in the underlying data generating process. Policy implications are of interest in the current conjecture that there are voices for hikes in the interest rates despite the anemic euro-area recovery and the geopolitical tensions. |
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| Keywords: Interest rates, Unconventional Monetary Policy, Dynamic Threshold Analysis, Euro-area. |
JEL: G2 - Financial Institutions and Services: General
E4 - Money and Interest Rates: General |
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| Manuscript Received : Jun 25 2025 | | Manuscript Accepted : Sep 30 2025 |
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