[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/116919.html
   My bibliography  Save this paper

The bank lending channel and monetary transmission in Central, Eastern and South-Eastern European countries

Author

Listed:
  • Papavangjeli, Meri
Abstract
Using disaggregated data for 266 individual banks from Bankscope database and other supplementary sources, this article investigates the functioning of the bank lending channel and monetary transmission in 10 Central, Eastern and South-Eastern European (CESEE) countries over the period 2010-2018. It also takes into account the banks’ characteristics such as: size and capitalisation, classifying the countries in three groups according to the development level of their banking sector, captured by the EBRD banking reform criteria. Results confirm the theory of bank lending channel, with smaller banks being more sensitive to monetary contractions in less developed financial systems. Capitalisation has a positive effect on loan growth, and changes in funding costs have the most significant impact on small and less capitalised banks. GDP growth and inflation have a positive impact on loan growth in all country groups.

Suggested Citation

  • Papavangjeli, Meri, 2021. "The bank lending channel and monetary transmission in Central, Eastern and South-Eastern European countries," MPRA Paper 116919, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116919
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/116919/1/MPRA_paper_116919.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dejan Kovacevic, 2015. "Empirical Evidence for the Bank Lending Channel in Bosnia and Herzegovina: Does Lending Differ Between Large and Small Banks?," IHEID Working Papers 10-2015, Economics Section, The Graduate Institute of International Studies.
    2. Kashyap, Anil K. & Stein, Jeremy C., 1995. "The impact of monetary policy on bank balance sheets," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 151-195, June.
    3. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    4. Michael Ehrmann & Leonardo Gambacorta & Jorge Martinez-PagÈs & Patrick Sevestre & Andreas Worms, 2003. "The Effects of Monetary Policy in the Euro Area," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(1), pages 58-72.
    5. Golinelli, Roberto & Rovelli, Riccardo, 2005. "Monetary policy transmission, interest rate rules and inflation targeting in three transition countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 183-201, January.
    6. Milan Eliskovski, 2018. "Investigating credit transmission mechanism in the Republic of Macedonia: evidence from Vector Error Correction Model," Working Papers 2018-02, National Bank of the Republic of North Macedonia.
    7. Driscoll, John C., 2004. "Does bank lending affect output? Evidence from the U.S. states," Journal of Monetary Economics, Elsevier, vol. 51(3), pages 451-471, April.
    8. Jeremy C. Stein & Anil K. Kashyap, 2000. "What Do a Million Observations on Banks Say about the Transmission of Monetary Policy?," American Economic Review, American Economic Association, vol. 90(3), pages 407-428, June.
    9. Ehrmann, Michael & Backé, Peter, 2003. "Monetary policy transmission in the euro area: any changes after EMU?," Working Paper Series 240, European Central Bank.
    10. Ewa Wrobel & Malgorzata Pawlowska, 2002. "Monetary transmission in Poland: some evidence on interest rate and credit channels," NBP Working Papers 24, Narodowy Bank Polski.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jimborean, Ramona, 2009. "The role of banks in the monetary policy transmission in the new EU member states," Economic Systems, Elsevier, vol. 33(4), pages 360-375, December.
    2. Sajjad Zaheer & Steven Ongena & Sweder J.G. van Wijnbergen, 2013. "The Transmission of Monetary Policy Through Conventional and Islamic Banks," International Journal of Central Banking, International Journal of Central Banking, vol. 9(4), pages 175-224, December.
    3. Altunbas, Yener & Gambacorta, Leonardo & Marques-Ibanez, David, 2009. "Securitisation and the bank lending channel," European Economic Review, Elsevier, vol. 53(8), pages 996-1009, November.
    4. Altunbas, Yener & Gambacorta, Leonardo & Marques-Ibanez, David, 2010. "Bank risk and monetary policy," Journal of Financial Stability, Elsevier, vol. 6(3), pages 121-129, September.
    5. David Martinez-Miera & Rafael Repullo, 2019. "Monetary Policy, Macroprudential Policy, and Financial Stability," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 809-832, August.
    6. Massimiliano Affinito & Fabio Farabullini, 2006. "An empirical analysis of national differences in the retail bank interest rates of the euro area," Temi di discussione (Economic working papers) 589, Bank of Italy, Economic Research and International Relations Area.
    7. Balazs Egert & Ronald MacDonald, 2006. "Monetary Transmission Mechanism in Transition Economies: Surveying the Surveyable," CESifo Working Paper Series 1739, CESifo.
    8. Khan, Habib Hussain & Ahmad, Rubi Binti & Gee, Chan Sok, 2016. "Bank competition and monetary policy transmission through the bank lending channel: Evidence from ASEAN," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 19-39.
    9. Burkhard Raunig & Johann Scharler & Friedrich Sindermann, 2017. "Do Banks Lend Less in Uncertain Times?," Economica, London School of Economics and Political Science, vol. 84(336), pages 682-711, October.
    10. Fungáčová, Zuzana & Nuutilainen, Riikka & Weill, Laurent, 2016. "Reserve requirements and the bank lending channel in China," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 37-50.
    11. Albertazzi, Ugo & Barbiero, Francesca & Marqués-Ibáñez, David & Popov, Alexander & Rodriguez d’Acri, Costanza & Vlassopoulos, Thomas, 2020. "Monetary policy and bank stability: the analytical toolbox reviewed," Working Paper Series 2377, European Central Bank.
    12. Chmielewski, Tomasz, 2005. "Bank risks, risk preferences and lending," MPRA Paper 5131, University Library of Munich, Germany, revised 15 Jan 2006.
    13. Burgstaller Johann, 2010. "Bank Lending and Monetary Policy Transmission in Austria," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(2), pages 163-185, April.
    14. Filippo Ippolito & Ali K. Ozdagli & Ander Pérez Orive, 2013. "Is bank debt special for the transmission of monetary policy? Evidence from the stock market," Economics Working Papers 1384, Department of Economics and Business, Universitat Pompeu Fabra.
    15. Robert Bichsel & Josef Perrez, 2005. "In Quest of the Bank Lending Channel: Evidence for Switzerland using Individual Bank Data," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(II), pages 165-190, June.
    16. Andrea Venegoni & Massimiliano Serati, 2017. "The Symmetry of ECB Monetary Policy Impact Under Scrutiny: An Assessment," LIUC Papers in Economics 306, Cattaneo University (LIUC).
    17. Jean Christine A. Armas, 2021. "Is the Bank Lending Channel of Monetary Policy Evident in the Philippines? A Dynamic Panel Data Approach," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 246-269, September.
    18. Gambacorta, Leonardo, 2005. "Inside the bank lending channel," European Economic Review, Elsevier, vol. 49(7), pages 1737-1759, October.
    19. Malovaná, Simona & Frait, Jan, 2017. "Monetary policy and macroprudential policy: Rivals or teammates?," Journal of Financial Stability, Elsevier, vol. 32(C), pages 1-16.
    20. Emiliano Luttini & Michael Pedersen, 2015. "Bank's Price Setting and Lending Maturity: Evidence from an Inflation- Targeting Economy," Working Papers Central Bank of Chile 762, Central Bank of Chile.

    More about this item

    Keywords

    bank lending channel; size and capitalisation; monetary transmission;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:116919. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.