Asset encumbrance is a central concept in the context of banks’ liquidity crises, as it is associated with their … describe how asset encumbrance has evolved in euro area banks, focusing on country and business model aggregates. Second, we … conduct an econometric analysis of the driving factors of banks’ asset encumbrance, highlighting the relevance of credit risk …

profits on maturity transformation, which is at the core of banks' business model, and therefore incentivizes bank lending …We provide evidence on the effect of the slope of the yield curve on economic activity through bank lending. Using … detailed data on banks' lending activities coupled with term premium shocks identified using high-frequency event study or …

-a core banking activity- thereby incentivizing bank lending. This effect is more pronounced for banks with higher leverage …We show that the slope of the yield curve affects bank lending and economic activity through an "expected bank …-increases bank profits and loan supply. Intuitively, a higher term premium raises the expected returns from maturity transformation …