scholarly journals Bank Lending (Credit) Channel of Monetary Transmission Mechanism

2018 ◽  
Vol 4 (1) ◽  
pp. 93-100
Author(s):  
Quratulain Ezam
Keyword(s):  
Monetary Policy ◽  
Secondary Data ◽  
Bank Lending ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Credit Channel ◽  
Distributed Lag ◽  
Auto Regressive ◽  
Bound Test ◽  
Transmission Of Monetary Policy

The significance of channel of bank lending for the process of transmission of monetary policy is examined employing the model of ARDL (Auto-regressive-distributed lag). This recently established bound test is used in order to determine the description of this model. The data that has been used for this research is based on secondary data of 7 years. The results appear constant with the hypothesis that providing by banks with comparatively frail capital responds great, the modification in the stance of monetary policy than providing by improved capitalized banks.

The Channels of Transmission of Monetary Policy

2021 ◽  
pp. 45-88
Author(s):  
Juan Antonio Morales ◽  
Paul Reding
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Asset Price ◽  
Balance Sheet ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
The Interest Rate ◽  
The Impact ◽  
Transmission Of Monetary Policy

This chapter explores the monetary transmission mechanism (MTM) in low financial development countries (LFDCs). It successively discusses the interest rate, asset price, bank credit, balance sheet, expectations, and real balance channels. For each channel, conceptual aspects about how it operates, how it transmits monetary policy impulses to the economy’s financial and real spheres, are first presented. Next, the impact of the specificities of LFDCs on the channel’s strength and reliability are examined and the available empirical evidence is surveyed. The chapter concludes with a global assessment of the effectiveness of the monetary transmission mechanism in LFDCs. Evidence points to a transmission mechanism that is effective although not very strong, and possibly also more uncertain than in advanced and emerging market countries.

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)

Asymmetric Information and the Transmission Mechanism of Monetary Policy

2007 ◽  
Vol 8 (3) ◽  
pp. 428-446 ◽  
Author(s):  
Ulrike Neyer
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Asymmetric Information ◽  
Credit Markets ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Credit Channel ◽  
Absolute Value ◽  
Monetary Transmission Mechanism ◽  
External Finance

Abstract This paper analyses the consequences of asymmetric information in credit markets for the monetary transmission mechanism. It shows that asymmetric information can not only reinforce but can also weaken or overcompensate the effects of the standard interest rate channel. Crucial is that informational problems lead to an external finance premium that can be positive or negative for marginal entrepreneurs. Tight money may lead to an increase in the absolute value of this premium, implying that there is a credit channel of monetary policy, but its working direction is ambiguous.

scholarly journals Effects of Bank Characteristics on Transmission of Monetary Policy Through Bank Lending Channel in Vietnam

2014 ◽  
Vol 219 ◽  
pp. 49-65
Author(s):  
CẢNH NGUYỄN PHÚC ◽  
ANH NGUYỄN QUỐC ◽  
QUÂN NGUYỄN HỒNG
Keyword(s):  
Monetary Policy ◽  
Commercial Banks ◽  
Generalized Method Of Moments ◽  
Bank Lending ◽  
Financial Statements ◽  
Equity Capital ◽  
Transmission Mechanism ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Transmission Of Monetary Policy

Credits from commercial banks influence various economic components, such as investment and consumption of durables and changes in monetary policy and therefore, affect the economy through supply of credits by commercial banks. This paper explores transmission of monetary policy through commercial bank lending channel in Vietnam in 2003-2012 by examining reaction of each bank to changes in monetary policy. Authors use the GMM (generalized method of moments) for panel data gathered from financial statements of commercial banks in 2003-2012. Results show that GMM helps detect the existence of bank lending channel in the transmission mechanism in Vietnam, and bank characteristics relating to equity capital, liquidity assets and risk degrees affect their flexibility when responding to changes in monetary policy in the surveyed period.

scholarly journals The transmission of monetary policy through bank lending: The floating rate channel

2018 ◽  
Vol 95 ◽  
pp. 49-71 ◽  
Author(s):  
Filippo Ippolito ◽  
Ali K. Ozdagli ◽  
Ander Perez-Orive
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Floating Rate ◽  
Transmission Of Monetary Policy

scholarly journals Fiscal federalism and accountability in Nigeria: an ARDL approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olabanji Olukayode Ewetan ◽  
Romanus Osabohien ◽  
Oluwatoyin Augustina Matthew ◽  
Abiola Ayopo Babajide ◽  
Ese Urhie
Keyword(s):  
Public Sector ◽  
Fiscal Federalism ◽  
Local Economic Development ◽  
Fiscal Decentralization ◽  
Secondary Data ◽  
Law And Order ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Auto Regressive

Purpose The purpose of this paper is to examine the relationship between fiscal federalism and accountability in Nigeria. Corruption is a global plague and is endemic in nature. Several policies have been adopted by the Nigerian Government to institutionalize accountability and combat the scourge of corruption that have hindered socio-economic progress but to no avail. Design/methodology/approach Thus, this study examined fiscal federalism and accountability issues in Nigeria using secondary data and used the auto-regressive distributed lag econometric technique to analyse the data. Findings The results from this study reveal that fiscal federalism fails to mitigate corruption in the long run in Nigeria because of poor bureaucratic quality (BQ) and ineffective law and order (LOR). Social implications Fiscal decentralization must be accompanied by legislations that will strengthen BQ of fiscal institutions at subnational levels and promote effective LOR. Originality/value This study recommends that for fiscal federalism to mitigate corruption in the long run, government must adopt appropriate policies to improve BQ and further strengthen LOR in Nigeria. The finding also suggests that to promote public sector accountability in Nigeria, government should ensure the simultaneous decentralization of expenditure and revenue to lower tiers of government. This study provides detailed empirical evidence that fiscal decentralization without accountability will accentuate public sector corruption, and in the long run, weaken local economic development initiative to boost growth and development.

scholarly journals Komparasi Jalur Moneter untuk Stabilitas Harga Dalam Kerangka Inflation Targeting Framework (Studi kasus pada interest rate, exchange rate dan credit channel)

2019 ◽  
Vol 8 (3) ◽  
pp. 181
Author(s):  
Setyo Tri Wahyudi ◽  
Rinny Apriliany Zakaria ◽  
Nurul Badriyah
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Interest Rates ◽  
Error Correction ◽  
Inflation Targeting ◽  
Correction Term ◽  
Secondary Data ◽  
Credit Channel ◽  
The Right

The monetary policy transmission mechanism has many ways in influencing inflation. This method became known as the monetary path. The use of appropriate channels in monetary policy will affect whether or not the objectives of the monetary policy are achieved. This study aims to determine which monetary path is appropriate for Indonesia, which is a developing country with an open economic system. The data used are secondary data taken from Bank Indonesia for the period 2005 to 2016. The research variables include inflation, BI-rate, credit interest rates (SBB), gross domestic product (GDP), exchange rate, bank reserve (BBR), and the amount of credit extended. This study focuses on the path of interest rates, exchange rates and bank credit using the Error Correction Model (ECM). The results of this study indicate that the right monetary path for Indonesia is the credit channel. This is because the value of the Error Correction Term (ECT) coefficient on the ECM model shows that the coefficient of the credit channel is smaller than the interest rate and exchange rate channel, which means that the imbalance that occurs can be resolved more quickly with the credit channel.

scholarly journals Microfinance Institutions and Financial Sector Growth in Nigeria (1992-2018)

2021 ◽  
Author(s):  
Emmanuel Abiodun Ayodeji ◽  
Adebayo Tunbosun Ogundipe
Keyword(s):  
Secondary Data ◽  
Financial Sector ◽  
Variable Coefficients ◽  
Model Specification ◽  
Microfinance Institutions ◽  
Negative Effects ◽  
Positive Effects ◽  
Distributed Lag ◽  
Long Run ◽  
Bound Test

Abstract The extent to which microfinance bank institutions have contributed to the financial sector growth has not been well unraveled in the extant literature in Nigeria, hence, this study examined the effects of microfinance banks on financial sector growth in Nigeria. It further investigated the dynamic form of relationship between microfinance banks and financial sector growth in Nigeria covering a temporal scope 1992 to 2018. The model specification was formulated using financial sector GDP as the proxy for dependent variable, microfinance credit, deposits, assets and investment were used as proxies for microfinance banks institutions. Secondary data were sourced from CBN statistical Bulletin and analyzed using auto regressive distributed lag bound test and its corresponding short and long run coefficients. Finding revealed an inconclusive long run relationship between microfinance bank institutions and financial sector growth. Checking the individual variable coefficients in the short run, microfinance credit has significant positive effect while microfinance assets has insignificant effects on financial sector growth. In the long run, it was revealed that microfinance bank deposits and assets exert insignificant positive effects while microfinance credits have insignificant effect and investments have significant negative effects on financial sector growth. The study concluded that, in the long run, microfinance bank institutions exert positive and insignificant effects on financial sector growth in Nigeria. It was therefore recommended that, for microfinance bank institutions to impact significantly on financial sector growth in Nigeria, its credit should be increased and be more directed to the target individuals and the level of their investments should be geared up so as to engender growth of the financial sector in Nigeria. Furthermore, microfinance bank institutions should maintain its status quo on deposits and assets, however, improvement on them should be encouraged so as to enhance the growth of the financial sector in Nigeria

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