The impact of monetary policy on bank lending in the Netherlands

2003 ◽  
pp. 335-346 ◽  
Author(s):  
L. De Haan
Keyword(s):  
Monetary Policy ◽  
The Netherlands ◽  
Bank Lending ◽  
The Impact

What Do a Million Observations on Banks Say About the Transmission of Monetary Policy?

2000 ◽  
Vol 90 (3) ◽  
pp. 407-428 ◽  
Author(s):  
Anil K Kashyap ◽  
Jeremy C Stein
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Monetary Transmission ◽  
Bank Lending Channel ◽  
Data Set ◽  
Balance Sheets ◽  
Lending Channel ◽  
The Impact ◽  
Transmission Of Monetary Policy ◽  
Quantitative Importance

We study the monetary-transmission mechanism with a data set that includes quarterly observations of every insured U.S. commercial bank from 1976 to 1993. We find that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets—i.e., banks with lower ratios of securities to assets. Moreover, this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution. Our results support the existence of a “bank lending channel” of monetary transmission, though they do not allow us to make precise statements about its quantitative importance. (JEL E44, E52, G32)

Bank Lending and Monetary Policy Transmission: A VECM Analysis for Germany / Bankkredite und geldpolitische Transmission: Eine VECM Analyse für Deutschland

2004 ◽  
Vol 224 (5) ◽  
Author(s):  
Oliver Hülsewig ◽  
Peter Winker ◽  
Andreas Worms
Keyword(s):  
Monetary Policy ◽  
Identification Problem ◽  
Bank Lending ◽  
Bank Loan ◽  
Reduced Form ◽  
Response Analysis ◽  
Credit Channel ◽  
Long Run ◽  
Short Run ◽  
The Impact

SummaryThis paper explores the existence of the credit channel in the transmission of monetary policy in Germany on the basis of a structural analysis of aggregate bank loan data. The empirical analysis is carried out in a vector error correction model (VECM), which allows to identify long-run cointegration relationships that can be interpreted as loan supply and loan demand equations. In this way, the fundamental identification problem inherent in reduced form approaches based on aggregate data is explicitly adressed. The short-run dynamics of the VECM is investigated by means of impulse response analysis, which sets out the impact of a monetary policy shock on the variables in the system. Empirical evidence consistent with the existence of a credit channel operating in Germany alongside the interest rate channel can be reported.

scholarly journals Regional economic structure and heterogeneous effects of monetary policy: evidence from Indonesian provinces

2022 ◽  
Vol 11 (1) ◽  
Author(s):  
Harry Aginta ◽  
Masakazu Someya
Keyword(s):  
Monetary Policy ◽  
Manufacturing Sector ◽  
Bank Lending ◽  
Impulse Response Functions ◽  
Regional Economic ◽  
Vector Autoregressive ◽  
Heterogeneous Effects ◽  
Structural Variables ◽  
Monetary Policy Shock ◽  
The Impact

AbstractWe analyze how regional economic structures affect the impact of monetary policy on rates of inflation across 34 Indonesian provinces. The paper first applies structural factor augmented vector autoregressive model (SFAVAR) to all the 34 provinces based on monthly provincial data in order to measure the length and magnitude of responses of regional inflation to monetary policy shock, derived from the consequential impulse response functions of 34 provinces. In the second step, we analyze the impact of economic structures on the length and magnitude of regional inflationary responses of 34 provinces. We find that the impacts of monetary policy across regions are significantly influenced by economic structural variables such as manufacturing sector share to GDP, mining sector share to GDP, bank lending share to GDP and export share to GDP. In addition, we found the spatial lag, rate of inflation of neighboring provinces, is also statistically significant. In a similar fashion, economic structural variables such as manufacturing sector share to GDP, construction sector share to GDP and investment share to GDP are found statistically significant in explaining regional differences of monetary policy efficiency. Our findings imply economic structures of provinces have to be incorporated to designing monetary policy in Indonesia.

Do foreign banks in India respond to global monetary policy shocks? A SVAR analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ameen Omar Shareef ◽  
K.P. Prabheesh
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Foreign Bank ◽  
Foreign Banks ◽  
Monetary Policy Shocks ◽  
Content Type ◽  
Indian Economy ◽  
Policy Shocks ◽  
The Impact

Purpose This paper aims to examine the role of foreign banks in transmitting global monetary policy shocks to India. Further, the authors try to explore the international bank lending channel and analyze the impact of global monetary policy on Indian macroeconomic variables. Design/methodology/approach The authors use a structural break unit root test and structural vector autoregression on monthly data from 1998 to 2018. Findings The study finds that the global monetary policy is significantly determining foreign banks’ lending in India; the evidence of a portfolio re-balancing channel in the process of global monetary policy transmission to the Indian economy; the exchange rate is significantly explaining the foreign bank credit dynamism in India; and evidence of international monetary policy spillover to the Indian economy. Originality/value This is the first attempt to analyze the role of foreign banks in the transmission of global monetary policy shocks to India, where the literature availability is limited. The finding of ineffective domestic monetary policy on foreign bank lending opens the need for an in-depth and diversified analysis of the role of foreign banks in the transmission of domestic monetary policy.

scholarly journals Monetary Policy and Nigeria’s Economy: An Impact Investigation

2017 ◽  
Vol 9 (11) ◽  
pp. 218
Author(s):  
Micheal Chidiebere Ekwe ◽  
Amah Kalu Ogbonnaya ◽  
Cordelia Onyinyechi Omodero
Keyword(s):  
Monetary Policy ◽  
Private Sector ◽  
Central Bank ◽  
Money Supply ◽  
Substantial Reduction ◽  
Bank Lending ◽  
Series Data ◽  
Major Objective ◽  
Lending Rate ◽  
The Impact

The major objective of this study is to empirically analyze the impact of monetary policy on the economy of Nigeria. To achieve this major objective, the study made use of broad money supply (M2) and credit to the private sector (CPS) as the independent variables explaining the dependent variable which is the Gross Domestic Product (GDP). The time series data employed cover the period of 1996 to 2016 and have been collected from the Central Bank of Nigeria Statistical Bulletin. The statistical tool used in this study is the multi regression and student t-test with the aid of statistical package for social sciences (SPSS) to analyze the impact of the individual explanatory variables on the economy. The result indicates that the monetary policy in Nigeria does not have significant impact on the economy. At 5% level of significance, the broad money supply (M2) is 0.36 > 0.05 while the CPS shows 0.22 > 0.05. The result proves that the broad money supply has not been properly regulated and the bank lending rate to the private sectors so high that the economy has been adversely affected. The study therefore, recommends that the Central Bank of Nigeria should put every machinery in place to ensure that the monetary policy is geared towards economic growth through substantial reduction of bank lending rate to the private sector and proper regulation of broad money supply.

Effectiveness and channels of macroprudential policies: lessons from the Euro area

2017 ◽  
Vol 25 (3) ◽  
pp. 271-306 ◽  
Author(s):  
Yuanyan Zhang ◽  
Thierry Tressel
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
Panel Var ◽  
Bank Capital ◽  
Credit Growth ◽  
Content Type ◽  
Macroprudential Policies ◽  
The Impact

Purpose The design of a macro-prudential framework and its interaction with monetary policy has been at the forefront of the policy agenda since the global financial crisis. However, most advanced economies (AEs) have little experience using macroprudential policies. As a result, relatively little is known empirically about macroprudential instruments’ effectiveness in mitigating systemic risks in these countries, about their channels of transmission, and about how these instruments would interact with monetary policy. This paper aims to fill in the gap. Design/methodology/approach The authors develop a new approach using the euro area bank lending survey to assess the effectiveness of macro-prudential policies in containing credit growth and house price appreciation in mortgage markets. Estimation is performed under the panel regressions (OLS, GLS) and panel VAR setup. Endogeneity issues arising from measures of macro-prudential policies are addressed by introducing GMM estimation and various instruments. Findings The authors find instruments targeting the cost of bank capital most effective in slowing down mortgage credit growth, and that the impact is transmitted mainly through price margins, the same banking channel as monetary policy. Limits on loan-to-value ratios are also effective, especially when monetary policy is excessively loose. Originality/value With limited data on macroprudential policy measures in the AEs, this paper proposed a new methodology of using answers from bank lending survey as proxies to assess the effectiveness of specific macroprudential measures and their transmission channels.

scholarly journals Unconventional Monetary Policy, Bank Lending, and Security Holdings: The Yield-Induced Portfolio-Rebalancing Channel

2019 ◽  
pp. 1-38
Author(s):  
Karol Paludkiewicz
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Government Bond ◽  
Unconventional Monetary Policy ◽  
Average Yield ◽  
Difference In Differences ◽  
Portfolio Rebalancing ◽  
Large Yield ◽  
Policy Bank ◽  
The Impact

This article studies the impact of unconventional monetary policy on bank lending and security holdings. I exploit granular security register data and use a difference- in-differences regression setup to provide evidence for a yield-induced portfolio rebalancing: Banks experiencing large average yield declines in their securities portfolio, induced by unconventional monetary policy, increase their real-sector lending more strongly relative to other banks. The effect is stronger for banks facing many reinvestment decisions. Moreover, I find that banks with large yield declines reduce their government bond holdings and sell securities bought under the asset-purchase program of the European Central Bank (ECB).

scholarly journals Monetary policy and bank lending in euro area since the outset of the global financial crisis

2020 ◽  
pp. 10-10
Author(s):  
Agata Wierzbowska
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Euro Area ◽  
Global Financial Crisis ◽  
Banking System ◽  
Bank Lending ◽  
Liquidity Provision ◽  
The Individual ◽  
The Global Financial Crisis ◽  
The Impact

In this article, we present the impact of the monetary policy stance of the European Central Bank(ECB)since 2007 on bank lending in the euro area and compare the effects of the main measures: interest rate changes, liquidity provision, and asset purchase programmes. We also analyse the channels through which monetary policy might influence the banking system and narrow our focus to the individual countries. The main results indicate stimulating impact of ECB?s policy stance on bank lending that extends its influence mainly through interest rate cuts further supported by the liquidity provision and asset purchase programmes. However, we also find considerable differences across the member states, of ten depending on the state of the banking system and loan demand in the member state. The results support the variety of monetary policy measures introduced by the ECB, as each played its own role in supporting the banking system and encouraging bank lending in the euro area.

scholarly journals Size of Banks as a Factor Which Impacts the Efficiency of the Bank Lending Channel

e-Finanse ◽  
2020 ◽  
Vol 16 (1) ◽  
pp. 36-44 ◽  
Author(s):  
Filip Świtała ◽  
Iwona Kowalska ◽  
Karolina Malajkat
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Banking Sector ◽  
Bank Lending ◽  
Annual Data ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Lending Policy ◽  
Cooperative Banks ◽  
The Impact

AbstractIn most economies the banking sector plays the major role in the financial system. Therefore, it is of great importance to analyse and understand the mechanism of transmission of monetary policy and its impact on the banking sector. One of the possible repercussions of changing the level of official interest rates is the ability to influence the size of bank lending, by means of the bank lending channel. The key aspect our research is a thorough understanding of the functioning of the bank lending channel, with the main goal of this study being an examination of the efficiency of monetary policy transmission through the bank lending channel depending on the size of banks in the sector. This paper examines the abovementioned relation using annual data from 1995-2015 by 1709 commercial and cooperative banks from 27 EU countries and analyzing them in various econometric models. The results indicate that there is a positive impact of a bank’s size on loan growth (defined as the bank size increases, the impact of changes in interest rates in the bank’s lending policy is getting smaller), however, interaction between the variables of size and the interest rate, was proved to be insignificant (in the group of all analysed banks, as well as in commercial and cooperative banks separately).

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