Market structure in banking and the bank lending channel: evidence from the bank-level data in Asian and Latin American countries

2021 ◽  
Author(s):  
Yuan Li
Keyword(s):  
Market Structure ◽  
Latin American ◽  
Bank Lending ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Level Data ◽  
Latin American Countries

scholarly journals Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit

2018 ◽  
Vol 53 (4) ◽  
pp. 1441-1477 ◽  
Author(s):  
Ross Levine ◽  
Chen Lin ◽  
Wensi Xie
Keyword(s):  
Trade Credit ◽  
Social Trust ◽  
Bank Lending ◽  
Banking Crises ◽  
Bank Lending Channel ◽  
Firm Level ◽  
Informal Finance ◽  
Lending Channel ◽  
Level Data ◽  
Corporate Profits

Are firms more resilient to systemic banking crises in economies with higher levels of social trust? Using firm-level data in 34 countries from 1990 through 2011, we find that liquidity-dependent firms in high-trust countries obtain more trade credit and suffer smaller drops in profits and employment during banking crises than similar firms in low-trust economies. The results are consistent with the view that when banking crises block the normal bank-lending channel, greater social trust facilitates access to informal finance, cushioning the effects of these crises on corporate profits and employment.

The roles of domestic and foreign Islamic banks in Malaysian monetary transmission

2014 ◽  
Vol 7 (2) ◽  
pp. 161-169 ◽  
Author(s):  
Fidlizan Muhammad ◽  
Asmak Ab Rahman ◽  
Ahmad Azam Sulaiman
Keyword(s):  
Monetary Policy ◽  
Banking System ◽  
Bank Lending ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Bank Lending Channel ◽  
Content Type ◽  
Lending Channel ◽  
Level Data ◽  
Loan Supply

Purpose – The aim of this paper is to empirically test the presence of the bank lending channel for the Islamic banking system in Malaysia. Design/methodology/approach – Distributional effects from monetary policy changes were analyzed by three bank characteristics such as size, liquidity and capital. Using the econometric model by Kashyap and Stein (1995), the implementation of a policy contraction leads to reduction in loan supply because some banks may not able to offset a reduction in deposits. The paper explores the response shown between domestic and foreign Islamic banks in Malaysia using bank-level data from 2005 to 2010. Findings – The empirical result indicates presence of the bank lending channel in the Islamic banking system in Malaysia, size and liquidity as sources of difference response of financing supply in domestic bank and capital for foreign Islamic bank and Islamic interbank rate as an efficient tool in conducting monetary policy especially in the Islamic banking system. Originality/value – The paper manages to explore the effectiveness of Islamic the monetary policy tools in the Islamic Banking system in Malaysia. Using Islamic interbank rate as a policy tool, it provides valuable view to policy makers, who are analyzing for efficiency of transmission channel.

scholarly journals The internationalization of domestic banks and the credit channel of monetary policy

2021 ◽  
Author(s):  
Paola Morales ◽  
Daniel Osorio-Rodíguez ◽  
Juan S. Lemus-Esquivel ◽  
Miguel Sarmiento
Keyword(s):  
Monetary Policy ◽  
Risk Taking ◽  
Bank Lending ◽  
Policy Changes ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Level Data ◽  
International Banks ◽  
Domestic Banks ◽  
Loan Growth

How does the expansion of domestic banks in international markets affect the bank lending channel of monetary policy? Using bank-firm loan-level data, we find that loan growth and loan rates from international banks respond less to monetary policy changes than domestic banks and that internationalization partially mitigates the risk-taking channel of monetary policy. Banks with a large international presence tend to tolerate more their credit risk exposition relative to domestic banks. Moreover, international banks tend to rely more on foreign funding when policy rates change, allowing them to insulate better the monetary policy changes from their credit supply than domestic banks. This result is consistent with the predictions of the internal capital markets hypothesis. We also show that macroprudential FX regulation reduces banks with high FX exposition access to foreign funding, ultimately contributing to monetary policy transmission. Overall, our results suggest that the internationalization of banks lowers the potency of the bank lending channel. Furthermore, it diminishes the risk-taking channel of monetary policy within the limit established by macroprudential FX regulations.

Bank lending channel in Zambia: empirical evidence from bank level data

2015 ◽  
Vol 42 (6) ◽  
pp. 1159-1174 ◽  
Author(s):  
Anthony Simpasa ◽  
Boaz Nandwa ◽  
Tiguéné Nabassaga
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Dynamic Panel Data ◽  
Policy Framework ◽  
Relationship Lending ◽  
Bank Lending Channel ◽  
Content Type ◽  
Lending Channel ◽  
Level Data ◽  
Effect Of Monetary Policy

Purpose – The purpose of this paper is to explore the effect of monetary policy on the lending behaviour of commercial banks in Zambia using bank-level data. Design/methodology/approach – Dynamic panel data econometric analysis is used to uncover the evidence of monetary transmission mechanism in Zambian banking industry. Other specifications are used as robustness checks. Findings – Contrary to received evidence, the authors find that the bank lending channel in Zambia operates mainly through large banks. The effect of monetary policy on medium-sized banks is moderate while it is virtually non-existent for smaller banks. Furthermore, the data does not show evidence of relationship lending for smaller banks. Originality/value – Overall, the findings of this investigation suggest that price signals, rather than quantity aggregates, matter the most in the transmission of monetary policy in Zambia. The results therefore lend support to the central bank’s recent shift in monetary policy framework from using monetary aggregates to interest rate targeting as a means to strengthen effectiveness of monetary policy.

scholarly journals Market structure, state ownership and monetary policy transmission through bank lending channel: Evidence from Vietnamese commercial banks

2021 ◽  
Vol 10 (3) ◽  
pp. 164-177
Author(s):  
Huu Huan Nguyen ◽  
Minh Vu Ngo ◽  
Thanh Phuc Nguyen
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Market Structure ◽  
Commercial Banks ◽  
Banking Sector ◽  
Bank Lending ◽  
State Ownership ◽  
Bank Loan ◽  
Bank Lending Channel ◽  
Lending Channel

This paper examines the impact of market structure and state ownership on bank lending as a transmission channel for monetary policies. For controlling the effects of bank heterogeneities and macroeconomic factors on bank lending, dynamic models using two-step difference GMM with panel data collected from 25 Vietnamese commercial banks and the Vietnamese banking sector from 1999 to 2017 are employed. Results indicate that a higher level of concentration in the banking market and state ownership dampen the expected impacts of interbank interest rate on the loan growth in commercial banks, which decreases the effectiveness of monetary policy via the bank lending channel. These results are robust regarding the use of alternative measures of market structure and the inclusion of event time variables in the dynamic model. Based on the findings, monetary policy could be implied using the significant moderating impacts of state-ownership as well as the market structure of the Vietnamese banking sector on the relationship between bank loan supply and interbank interest rate.

scholarly journals The Bank Lending Channel of Monetary Policy? The Panel Evidence from Egypt

2014 ◽  
Vol 16 (3) ◽  
pp. 255 ◽  
Author(s):  
Mohamed Aseel Shokr ◽  
Zulkefly Abdul Karim ◽  
Mansor Jusoh ◽  
Mohd. Azlan Shah Shah Zaidi
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Empirical Studies ◽  
Bank Lending ◽  
Bank Loans ◽  
Bank Loan ◽  
Bank Lending Channel ◽  
Lending Channel ◽  
Level Data ◽  
Effect Of Monetary Policy

This paper examines the relevance of the bank lending channel of monetary policy in Egypt using bank-level data. Previous empirical studies in Egypt that used macro-level data have not supported the relevance of the bank lending channel. However, using a sample of 32 commercial banks for the period from 1998 until 2011 and a dynamic panel GMM technique, the empirical findings revealed the relevance of the bank lending channel of monetary policy in Egypt. Moreover, there is a heterogeneity effect of monetary policy on bank loans according to bank size, in which the small banks are more affected during a monetary contraction than larger banks. This finding signals that the monetary authorities in Egypt should take cognizance of the stability of interest rates in order to stabilize the bank loan supply.       

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