The study looked at how changes in interest rates affect the riskiness of bank loans in Spain. By analyzing data on over twenty-three million loans, the researchers found that lower interest rates lead to banks giving out riskier loans and relaxing their lending standards. However, lower rates also reduce the risk of existing loans. When interest rates are very low before a loan is made and then rise, it creates the highest level of credit risk. Different types of banks react differently to low interest rates, with smaller banks and those with fewer lending options taking on more risk. Additionally, higher GDP growth reduces credit risk for both new and existing loans.