3  For evidence on disruptions in monetary transmission see Ciccarelli, M., Maddaloni, A., and Peydró, J.-L. (2013), “Heterogeneous transmission mechanism: monetary policy and financial fragility in the Eurozone”, Economic Policy vol. 28, issue 75, July 2013.
And, indeed, we find that when the yield curve steepens, banks increase the maturity of their securities holdings. Moreover, the magnitudes of these portfolio shifts are large in the aggregate, so that if they had to be absorbed by other, less yield-oriented investors, the shifts could plausibly drive changes in marketwide term premiums.