We build a model of banking industry dynamics with imperfect competition to address the following question: How does monetary policy affect lending outcomes across time, given the spatial expansion of the banking industry? Geographic expansion of the banking industry followed from the elimination ...

The long period of low interest rates that followed the global financial crisis has rekindled interest in how short-term interest rates affect bank behavior. In particular it has led to a debate on how low policy rates influence bank risk-taking. This risk-taking channel of monetary policy corresponds ...