The Bank Lending Channel of Monetary Policy: Does the Financial Structure of Banks Matter

Serie

• Borradores de economía

Resumen

• This paper tests the impact of the financial structure of banks on the bank lending channel of monetary policy transmission in Colombia. Using a monthly panel of 51 commercial banks for the period 1996:4-2014:8, we find that an increase in the monetary policy interest rate significantly reduces bank loan growth. The magnitude of this effect critically depends on banks’ financial structure. Additionally, we identify an asymmetric effect depending on the monetary policy stance. The bank lending channel is stronger in times of monetary contraction than during expansions. We show that this asymmetric behavior is due to the heterogeneous response of banks with different levels of solvency to the monetary policy stance. We discuss the policy implications of our findings.

autores

• Gómez-González, José Eduardo
• Kutan, Ali M.
• Ojeda-Joya, Jair
• Ortiz, María Camila

fecha de publicación

• 2016-08

Área temática

• E5 - Política monetaria, bancos centrales, oferta de dinero y crédito
• E52 - Política monetaria
• E59 - Política monetaria, bancos centrales, oferta de dinero y crédito: Otros
• G21 - Bancos; Instituciones de depósito; Instituciones Microfinancieras; Hipotecas

Enfoque geográfico

• Colombia  Country
• South America  Continent

Líneas de investigación

• Bank Financial Structure
• Bank Lending Channel
• Colombia
• Heterogeneous Effects
• Monetary Policy Transmission
• Solvency

Identificador de objeto digital (DOI)

• https://doi.org/10.32468/be.953

Issue

• 953