Seminario - Nima Fazeli

Nima Fazeli (Paris School of Business) will present his paper “Strategic Liability Management Under Unconventional Monetary Policy: Evidence from European Banks,” alongside Michael Sigmund (Oesterreichische Nationalbank). 

Abstract:

We study how banks strategically manage their liability structure under unconventional monetary policy (UMP), focusing on maturity segmentation and central bank (TLTRO) funding. Using a rich panel of European banks, we find that banks with high TLTRO uptake lower deposit rates for some maturities while shielding other maturities from policy rate cuts, effectively insulating a portion of their deposit base. This liability segmentation weakens the pass-through of monetary policy changes, as funding costs adjust less than standard models would predict. Our results provide new insights into how negative rates and abundant central bank liquidity reshape the transmission mechanism, emphasizing the critical role of liabilities in explaining persistent anomalies in policy pass-through.