For the largest 55 German banks, we detect the presence of countercyclical yield seeking in the form of acquisition of … high-yielding periphery bonds in the period from Q1 2008 to Q2 2011. This investment strategy is pursued by banks not … subject to a bailout, banks characterised by high capitalisation, banks that rely on short-term wholesale funding, and trading …

When banks are faced with a funding shortage in money market wholesale funding, they partly substitute by tapping other … implications, which go beyond the balance sheets of banks affected by the funding shortage. Banks which are forced to seek … alternative funding sources ("affected" banks) crowd out other initially unaffected banks, which pay substantially more to retain …

We show that nonbanks (funds, shadow banks, fintech) reduce the effectiveness of tighter monetary policy on credit … since 1990s and Gertler-Karadi monetary policy shocks. Higher policy rates shift credit supply from banks to less …