Monetary policy struggles to help high-risk banks, hurting borrowers and employment.
The study looked at how central bank money affects bank deposits and loan rates in Europe from 2006 to 2010. They found that risky banks didn't lower loan rates even with more central bank money, hurting high-risk borrowers. This led to less money paid out, less spending, and fewer jobs. This shows that when banks are struggling, central bank help might not work as well as expected.