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Is There a Bank Lending Channel of Monetary Policy in Spain?

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Author Info

  • Ignacio Hernando

    (Banco de España)

  • Jorge Martínez Pagés

    (Banco de España)

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    Abstract

    This paper uses panel data on banks, for the period 1991-98, to test the existence of a banklending channel in the Spanish economy. In order to distinguish between loan demand and supply movements, several exercises are performed. First, we analyse the differential responses, to monetary policy changes, of bank lending by banks with different size, liquidity and capitalisation. Second, we analyse the response to an exogenous deposit-reducing shock (a taxinduced shift from deposits to mutual fund shares). As this involves a pure loan supply shock, it best solves the above-mentioned identification problem. Our results are mostly against the existence of a bank-lending channel in the period under analysis. This result appears to be related to the important role of many small banks as collectors of savings, meaning they have a large volume of resources available for lending.

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/01/Fic/dt0117e.pdf
    File Function: First version, 2001
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    Bibliographic Info

    Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0117.

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    Length: 43 pages
    Date of creation: 2001
    Date of revision:
    Handle: RePEc:bde:wpaper:0117

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    Web page: http://www.bde.es/
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    Related research

    Keywords: bank lending; bank funding; monetary transmission mechanism;

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    Cited by:
    1. Nikolay Nenovsky & Evgeni Peev & Todor Yalamov, 2003. "Banks-Firms Nexus under the Currency Board: Empirical Evidence from Bulgaria," William Davidson Institute Working Papers Series 555, William Davidson Institute at the University of Michigan.
    2. Sevestre, Patrick & Martinez-Pages, Jorge & Gambacorta, Leonardo & Ehrmann, Michael & Worms, Andreas, 2001. "Financial systems and the role of banks in monetary policy transmission in the euro area," Discussion Paper Series 1: Economic Studies 2001,18, Deutsche Bundesbank, Research Centre.
    3. Mojon, Benoît & Kashyap, Anil K. & Angeloni, Ignazio & Terlizzese, Daniele, 2002. "Monetary Transmission in the Euro Area : Where Do We Stand?," Working Paper Series 0114, European Central Bank.
    4. Gunji, Hiroshi & Miura, Kazuki & Yuan, Yuan, 2009. "Bank competition and monetary policy," Japan and the World Economy, Elsevier, vol. 21(1), pages 105-115, January.
    5. Carrera, César, 2011. "El canal del crédito bancario en el Perú: Evidencia y mecanismo de transmisión," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 22, pages 63-82.
    6. Golodniuk, Inna, 2006. "Evidence on the bank-lending channel in Ukraine," Research in International Business and Finance, Elsevier, vol. 20(2), pages 180-199, June.
    7. Gupta, Abhay, 2004. "Comparing Bank Lending Channel in India and Pakistan," MPRA Paper 9281, University Library of Munich, Germany.
    8. Viviana Fernández, 2004. "The Credit Channel in an Emerging Economy," Documentos de Trabajo 175, Centro de Economía Aplicada, Universidad de Chile.

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