Volume 17, Number 1 March 2021 Volume 17, Number 1Volume BANKING OF CENTRAL JOURNAL INTERNATIONAL March 2021 INTERNATIONAL JOURNAL OF CENTRAL BANKING Introduction Alternative Models of Interest Rate Pass-Through in Normal and Negative Territory Mauricio Ulate The Rise of Fintech Lending to Small Businesses: Businesses’ Perspectives on Borrowing Brett Barkley and Mark Schweitzer ***** Monetary Policy with Negative Interest Rates: De-Linking Cash from Digital Money Katrin Assenmacher and Signe Krogstrup Modeling the Consumption Response to the CARES Act Christopher D. Carroll, Edmund Crawley, Jiri Slacalek, and Matthew N. White The First Line of Defense: The Discount Window during the Early Stages of the Financial Crisis Elizabeth Klee International Inflation Spillovers: The Role of Different Shocks Gregor Bäurle, Matthias Gubler, and Diego R. Känzig Always Look on the Bright Side? Central Counterparties and Interbank Markets during the Financial Crisis Massimiliano Affinito and Matteo Piazza Pension Funds’ Herding Dirk W.G.A. Broeders, Damiaan H.J. Chen, Peter A. Minderhoud, and C.J. Willem Schudel International Journal of Central Banking Volume 17, Number 1 March 2021 Introduction 1 Alternative Models of Interest Rate Pass-Through in Normal 3 and Negative Territory Mauricio Ulate The Rise of Fintech Lending to Small Businesses: Businesses’ 35 Perspectives on Borrowing Brett Barkley and Mark Schweitzer ∗∗∗∗∗ Monetary Policy with Negative Interest Rates: De-Linking Cash from 67 Digital Money Katrin Assenmacher and Signe Krogstrup Modeling the Consumption Response to the CARES Act 107 Christopher D. Carroll, Edmund Crawley, Jiri Slacalek, and Matthew N. White The First Line of Defense: The Discount Window during the Early 143 Stages of the Financial Crisis Elizabeth Klee International Inflation Spillovers: The Role of Different Shocks 191 Gregor B¨aurle, Matthias Gubler, and Diego R. K¨anzig Always Look on the Bright Side? Central Counterparties and 231 Interbank Markets during the Financial Crisis Massimiliano Affinito and Matteo Piazza Pension Funds’ Herding 285 Dirk W.G.A. Broeders, Damiaan H.J. Chen, Peter A. Minderhoud, and C.J. Willem Schudel The contents of this journal, together with additional materials provided by article authors, are available without charge at www.ijcb.org. Copyright c 2021 by the Association of the International Journal of Central Banking. All rights reserved. Brief excerpts may be reproduced or translated provided the source is cited. Consult www.ijcb.org for further information. The International Journal of Central Banking is published quarterly (ISSN: 1815-4654). Online access to the publication is available free of charge at www.ijcb.org. Changes to hard copy subscriptions and orders should be placed by e-mail at [email protected]. Renewals, claims, address changes, and requests for permission to reprint material from this journal should be addressed to: International Journal of Central Banking HS08.20 European Central Bank Sonnemannstr. 22 D-60640 Frankfurt am Main Germany Phone: +4969134495894 E-mail: [email protected] The views expressed in this journal do not necessarily represent the views of the Association of the International Journal of Central Banking or any of its members. ISSN: 1815-4654 International Journal of Central Banking Board of Directors Chairman Richard Clarida, Federal Reserve Board Board Members Elias Albagli, Central Bank of Chile Andre Minella, Central Bank of Brazil Ahmed Alkholifey, Saudi Arabian Monetary Authority Emanuel M¨onch, Deutsche Bundesbank David E. Altig, Federal Reserve Bank of Atlanta Gerard O’Reilly, Central Bank of Ireland Jan Marc Berk, The Nederlandsche Bank Eva Ortega, Bank of Spain Claudio Borio, Bank for International Settlements Michael D. Patra, Reserve Bank of India Jan Bruha, Czech National Bank Anna Paulson, Federal Reserve Bank of Chicago Paul Castillo, Central Reserve Bank of Peru Th´orarinn G. P´etursson, Central Bank of Lillian Cheung, Hong Kong Monetary Authority Iceland Laurent Clerc, Bank of France Sigal Ribon, Bank of Israel Andrew Colquhoun, Monetary Authority of Singapore Kasper Roszbach, Norges Bank Francisco G. Dakila Jr., Bangko Sentral ng Pilipinas Glenn Rudebusch, Federal Reserve Bank of San Troy Davig, Federal Reserve Bank of Kansas City Francisco Michael Dotsey, Federal Reserve Bank of Philadelphia Krislert Samphantharak, Bank of Thailand Luci Ellis, Reserve Bank of Australia C¸a˘grı Sarıkaya, Central Bank of Turkey Rosthom Fadli, Bank of Algeria Lawrence Schembri, Bank of Canada Eugenio Gaiotti, Banca d’Italia Woon Shin, Bank of Korea Yong Ha, Reserve Bank of New Zealand Ulf S¨oderstr¨om, Sveriges Riksbank Philipp Hartmann, European Central Bank Ellis Tallman, Federal Reserve Bank of Cleveland Jonathan Heathcote, Federal Reserve Bank of George Tavlas, Bank of Greece Minneapolis Geoff Tootell, Federal Reserve Bank of Boston Beverly Hirtle, Federal Reserve Bank of New York Dobieslaw Tymoczko, National Bank of Poland Elena Iorga, National Bank of Romania Hernando Vargas Herrera, Banco de la Rep´ublica Esa Jokivuolle, Bank of Finland Christopher Waller, Federal Reserve Bank of Signe Krogstrup, Danmarks Nationalbank St. Louis Michael Kumhof, Bank of England John Weinberg, Federal Reserve Bank of Thomas Laubach, Federal Reserve Board Richmond Ana Christina Leal, Bank of Portugal Rafael Wouters, National Bank of Belgium Carlos Lenz, Swiss National Bank Mine Y¨ucel, Federal Reserve Bank of Dallas Ye Liu, People’s Bank of China Ksenia Yudaeva, Central Bank of Russian Ken Matsushita, Bank of Japan Federation Editorial Board Managing Editor Luc Laeven European Central Bank Co-editors Klaus Adam Linda S. Goldberg Keith Kuester University of Mannheim Federal Reserve Bank of University of Bonn New York Tobias Adrian Elena Loutskina International Monetary Fund Oscar` Jord`a UVA Darden School of Federal Reserve Bank of Business Boragan Aruoba San Francisco University of Maryland Steven Ongena Sharon Kozicki University of Zurich Huberto Ennis Bank of Canada Federal Reserve Bank of Richmond Associate Editors Patrick Bolton Darrell Duffie Francesco Lippi Columbia University Stanford University LUISS University Michael D. Bordo Jordi Gal´ı Carmen M. Reinhart Rutgers University Centre de Recerca en Economia Harvard Kennedy School Mark Carey Internacional (CREI) H´el`ene Rey Federal Reserve Board Marvin Goodfriend London Business School Pierre Collin-Dufresne Carnegie Mellon University Jean-Charles Rochet Ecole´ Polytechnique F´ed´erale Michael B. Gordy University of Zurich de Lausanne Federal Reserve Board Andrew K. Rose Guy Debelle Luigi Guiso University of California, Reserve Bank of Australia Einaudi Institute Berkeley Douglas W. Diamond Andrew G. Haldane Lars E.O. Svensson University of Chicago Bank of England Stockholm School of Economics Graduate School of Business Takatoshi Ito J¨urgen von Hagen Francis Diebold Columbia University University of Bonn University of Pennsylvania David Lando Ernst-Ludwig von Thadden Michael Dotsey Copenhagen Business School University of Mannheim Federal Reserve Bank of Philip Lane Tsutomu Watanabe Philadelphia European Central Bank University of Tokyo Advisory Board Franklin Allen Hyun Song Shin Kazuo Ueda Imperial College London Bank for International University of Tokyo Charles Goodhart Settlements Carl E. Walsh London School of Economics John Taylor University of California Stanford University Michael Woodford Columbia University Introduction This issue of the International Journal of Central Banking includes two of the papers presented at the conference entitled “Structural Changes in the Financial System: New Theory and Evidence” hosted by the European Central Bank on August 20–21, 2020. The confer- ence was co-organized with the European Central Bank and Dan- marks Nationalbank. The two papers, chosen using the same rigor- ous standards applied to all International Journal of Central Bank- ing content, are “Alternative Models of Interest Rate Pass-Through in Normal and Negative Territory” by Mauricio Ulate; and “The Rise of Fintech Lending to Small Businesses: Businesses’ Perspec- tives on Borrowing” by Brett Barkley and Mark Schweitzer. The program committee for the conference was Tobias Adrian, Elena Carletti, Huberto Ennis, Linda Goldberg, Luc Laeven, and Steven Ongena. 1.