Optimal Central Bank Lending

The study examined the arguments and counterarguments within the scientific discussion on commercial banks credit and the performance of real sector in Nigeria. The main objective of the study is to examine the effect of commercial banks credit on the performance of the real sector in Nigeria.Data was sourced from Central Bank of Nigeria Statistical Bulletin. A systematization literary approach for data analysis was Regression Analysis. Findings revealed that bank credit and bank lending rate does not have significant impact on real sector performance in Nigeria. It was showed that there was a positive and significant relationship between agricultural credit guarantee scheme fund and agricultural production in Nigeria. The study therefore recommends that banks should be directed to channel their credits towards the real sector to facilitate overall economic growth and development in Nigeria. It was recommended that there is the need policies that will favor the revamp of the agricultural sector in Nigeria should be given pride of place. Also, monetary authority through the Central Bank of Nigeria should create adequate policies and strategies towards deepening of the financial sector and reducing the cost of credit/loans so as to enhance productivity and consequently enhance the growth of the key sectors of economy such as manufacturing sector.

Rollover Risk and Bank Lending Behavior: Evidence From Unconventional Central Bank Liquidity

SSRN Electronic Journal ◽

10.2139/ssrn.3216733 ◽

2018 ◽

Cited By ~ 6

Author(s):

Martina Jasova ◽

Caterina Mendicino ◽

Dominik Supera

Keyword(s):

Central Bank ◽

Bank Lending ◽

Rollover Risk ◽

Lending Behavior

Inside the Bank Box

The Oxford Handbook of the Economics of Central Banking ◽

10.1093/oxfordhb/9780190626198.013.12 ◽

2019 ◽

pp. 368-405

Author(s):

Leonardo Gambacorta ◽

Paul Mizen

Keyword(s):

Interest Rate ◽

Central Bank ◽

Interest Rates ◽

Adjustment Costs ◽

Bank Lending ◽

Bank Capital ◽

Bank Lending Channel ◽

Lending Channel ◽

Pass Through ◽

The Interest Rate

Central bank policy operates first through financial markets and then through banks as they adjust their interest rates. This chapter discusses the transmission of policy in this first step of the monetary transmission mechanism, known as interest-rate pass-through. Historically, the focus of attention has been the interest-rate channel. We show the origins of this channel via a microfounded model of interest-rate setting by deposit-taking institutions that are Cournot oligopolists facing adjustment costs. We then examine other channels such as the bank lending channel and the bank capital channel and the role of central bank communications, signaling, and forward guidance over future interest rates. Each is shown to influence the setting of current short-term interest rates. The chapter closes with some issues for the future of pass-through in the transmission process.

Ecuador banking sector is set for a comeback

Emerald Expert Briefings ◽

10.1108/oxan-db229903 ◽

2018 ◽

Keyword(s):

Private Sector ◽

Central Bank ◽

Banking Sector ◽

Bank Lending ◽

Foreign Banks ◽

Economic Recovery ◽

Content Type ◽

Loan Growth ◽

Double Digit

Subject Banking sector prospects. Significance Private sector banks in Ecuador enjoyed strong double-digit loan growth last year -- a reflection of the troubled economy’s gradual emergence from recession. That economic recovery, and the pragmatic willingness of President Lenin Moreno to work with the private sector, is generating optimism regarding the prospects of the country’s banking sector. Impacts Strong bank lending is key for economic recovery, allowing firms to increase investments and consumers to spend more. Taking the E-money system from the central bank shows Moreno’s pragmatism vis-a-vis the private sector. The planned sale of state-owned lender Banco del Pacifico could attract the interest of foreign banks.

Monetary Policy and Nigeria’s Economy: An Impact Investigation

International Journal of Economics and Finance ◽

10.5539/ijef.v9n11p218 ◽

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.

Lending to Private Borrowers and Other Private Assets

Central Banking before 1800 ◽

10.1093/oso/9780198849995.003.0005 ◽

2019 ◽

pp. 108-135

Author(s):

Ulrich Bindseil

Keyword(s):

Eighteenth Century ◽

Central Bank ◽

Commercial Banks ◽

Recent Literature ◽

Bank Lending ◽

Central Banks ◽

Central Banking ◽

Time Section ◽

Economic Rationale ◽

The Subject

This chapter recalls the economic rationale of central bank lending to private borrowers (Section 4.1) and argues that the recent literature has often underestimated the importance of such lending by early central banks, without this implying that central banks were really competing with ‘commercial’ banks (Section 4.2). Finally, it illustrates pre-eighteenth-century awareness of the subject by reviewing the literature of the time (Section 4.3). Lending of central banks to private borrowers had a number of advantages relevant as of the first centuries of central banking: (1) providing an option for granular asset diversification and expansion, allowing thereby also to increase the monetary base; (2) generating income with limited risks; (3) improving the availability and pricing of loans for private debtors; (4) anchorizing the central bank in society. Lending to private borrowers took in particular the form of Lombard and discount operations.

Reconsidering Central Bank Lending of Last Resort

European Business Organization Law Review ◽

10.1007/s40804-018-0109-3 ◽

2018 ◽

Vol 19 (4) ◽

pp. 883-922 ◽

Cited By ~ 1

Author(s):

Christian Hofmann

Keyword(s):

Central Bank ◽

Bank Lending

Theoretical aspects of mechanism of interaction between money and credit

VESTNIK OF ASTRAKHAN STATE TECHNICAL UNIVERSITY SERIES ECONOMICS ◽

10.24143/2073-5537-2019-4-83-93 ◽

2019 ◽

Vol 2019 (4) ◽

pp. 83-93

Author(s):

Oleg Usherovich Avis

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Commercial Banks ◽

Banking System ◽

Financial System ◽

Bank Lending ◽

National Bank ◽

Weak Points ◽

The Stability

The paper describes the central bank monetary policy that has been heavily criticized, largely due to the banks’ inability to identify emerging risks in a timely manner and to prevent threats to the stability of the entire global financial and banking system. A more rigorous expert-theoretical and public assessment is typical for analyzing the role of commercial banks in these processes, whereby they are recognized as the main culprits of recurrent crises. The excursion into the evolution of theoretical views on the problem under study allows to conclude that it is related to the credit nature of money, in which the activities of commercial banks are of great importance. This idea was shared by many foreign and Russian scientists, who at one time offered their recipes for improving the monetary mechanism, but remained not taken into account in practice. The initial positions of bank lending processes and money making on their basis in volumes and quality, often unregulated, have been analyzed. Much attention is paid to the role of the Central Bank, the bank customers and the state in shaping the credit nature of money. As an alternative to modern methods of monetary regulation, the idea of full-value money has been described. As an example, the phenomenon of the Swiss full-value money initiative in 2018 has been given. It is noted that the initiative demanded to ban issuing electronic (non-cash) money from the commercial banks in order to stabilize the financial system. The weak points of the reform include a threat to the stability of the money value, the low degree of independence of the National Bank of Switzerland. It has been inferred that the events taking place in the modern financial system may indicate significant transformations of the design and toolkit of the modern monetary policy

An alternative framework for a textbook analysis of the money multiplier

10.31235/osf.io/ngrcz ◽

2018 ◽

Author(s):

Jesse Aaron Zinn

Keyword(s):

Central Bank ◽

Money Supply ◽

Positive Relationship ◽

Bank Lending ◽

Textbook Analysis ◽

Standard Practice ◽

The Public ◽

Alternative Framework ◽

Money Multiplier ◽

The Relationship

In textbooks on the theory of money it is standard practice to hold both reserves and deposits fixed to study the relationship between the quantity of currency in the economy and the money multiplier. But doing so leads to a result that is contrary to the notion that if the public withdraws from their deposits in order to increase currency holdings then bank lending will decrease, causing a fall in both the money supply and the money multiplier. Specifically, when reserves are greater than deposits and both are fixed the money multiplier has a positive relationship with both currency holdings and the currency-deposit ratio. I show that these results are artifacts of implicitly assuming that the monetary authority behaves so as to keep deposits and reserves constant in response to a change in currency held by the public. Dropping these assumptions and abstracting from any response from the central bank results in an unconditionally non-positive relationship between currency holdings and the money multiplier.