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Is There a Bank lending Channel in France? Evidence From Bank Panel Data

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Author Info

  • Loupias, C.
  • Savignac, F.
  • Sevestre, P.

Abstract

The aim of this paper is to check the possible existence of a bank lending channel in France. For that purpose, we have estimated a dynamic reduced form model allowing for asymmetries in loan supply across banks, depending on their size, liquidity and capitalization. We have used a panel of 312 French banks observed quarterly over the period 1993-2000. We find some asymmetry between liquid and illiquid banks, the latter being more sensitive to a monetary policy tightening. This result is in accordance with that obtained for several other countries of the Euro area. It constitutes an indication that, as far as they can, French banks sell part of their liquid assets in order to shield their loan portfolio from the effects of increases in the interest rate. Contrary to what has been found for the US (e.g., see Kashyap and Stein (1995, 2000) and Kishan and Opiela (2000)), we do not find the two other banks' characteristics we consider (size and capitalization) to have any significant impact on bank lending.

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Bibliographic Info

Paper provided by Banque de France in its series Working papers with number 92.

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Length: 14 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:bfr:banfra:92

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Related research

Keywords: Monetary policy; Credit channel.;

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References

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  1. Favero, Carlo A & Flabbi, Luca & Giavazzi, Francesco, 1999. "The Transmission Mechanism of Monetary Policy in Europe: Evidence from Banks' Balance Sheets," CEPR Discussion Papers 2303, C.E.P.R. Discussion Papers.
  2. Loupias, Claire & Savignac, Frédérique & Sevestre, Patrick, 2001. "Monetary policy and bank lending in France: are there asymmetries?," Working Paper Series 0101, European Central Bank.
  3. Bernanke, Ben & Gertler, Mark, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Working Papers, C.V. Starr Center for Applied Economics, New York University 95-15, C.V. Starr Center for Applied Economics, New York University.
  4. Issing,Otmar & Gaspar,Vitor & Angeloni,Ignazio & Tristani,Oreste, 2001. "Monetary Policy in the Euro Area," Cambridge Books, Cambridge University Press, number 9780521788885, 9.
  5. 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.
  6. Michael Ehrmann & Leonardo Gambacorta & Jorge Martìnez-Pagès & Patrick Sevestre & Andreas Worms, 2001. "Fynancial Systems and the Role of Banks in Monetary Policy Transmission in the Euro area," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 432, Bank of Italy, Economic Research and International Relations Area.
  7. repec:cup:cbooks:9780521783248 is not listed on IDEAS
  8. Anil K Kashyap & Jeremy C. Stein, 1994. "The Impact of Monetary Policy on Bank Balance Sheets," NBER Working Papers 4821, National Bureau of Economic Research, Inc.
  9. Gambacorta, L. & Martínez-Pagés, J. & Sevestre, P. & Worms, A., 2002. "Financial Systems and the Role of Banks in Monetary Policy Transmission in the Euro Area.Author-Name: Ehrmann, M," Working papers, Banque de France 93, Banque de France.
  10. Worms, Andreas, 2001. "The reaction of bank lending to monetary policy measures in Germany," Working Paper Series 0096, European Central Bank.
  11. Gambacorta, Leonardo, 2001. "Bank-specific characteristics and monetary policy transmission: the case of Italy," Working Paper Series 0103, European Central Bank.
  12. Kishan, Ruby P & Opiela, Timothy P, 2000. "Bank Size, Bank Capital, and the Bank Lending Channel," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 32(1), pages 121-41, February.
  13. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  14. Élizabeth Kremp & Patrick Sevestre, 2000. "L'appartenance à un groupe facilite le financement des entreprises," Économie et Statistique, Programme National Persée, vol. 336(1), pages 79-92.
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Citations

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Cited by:
  1. Konstantins Benkovskis, 2008. "Is there a Bank Lending Channel of Monetary Policy in Latvia? Evidence from Bank Level Data," Working Papers 2008/01, Latvijas Banka.
  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, International Journal of Central Banking, vol. 9(4), pages 175-224, December.
  3. Roberto A. Santis & Paolo Surico, 2013. "Bank lending and monetary transmission in the euro area," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 28(75), pages 423-457, 07.
  4. Zaheer, S. & Ongena, S. & Wijnbergen, S.J.G. van, 2011. "The Transmission of Monetary Policy through Conventional and Islamic Banks," Discussion Paper, Tilburg University, Center for Economic Research 2011-078, Tilburg University, Center for Economic Research.
  5. Ignazio Angeloni & Anil K. Kashyap & Benoit Mojon & Daniele Terlizzese, 2003. "Monetary Transmission in the Euro Area: Does the Interest Rate Channel Explain it All?," NBER Working Papers 9984, National Bureau of Economic Research, Inc.
  6. Abdul Karim, Zulkefly & Wan Ngah, Wan Azman Saini & Abdul Karim, Bakri, 2010. "Bank lending channel of monetary policy: dynamic panel data evidence from Malaysia," MPRA Paper 26157, University Library of Munich, Germany.
  7. Wu, Ji & Luca, Alina C. & Jeon, Bang Nam, 2011. "Foreign bank penetration and the lending channel in emerging economies: Evidence from bank-level panel data," Journal of International Money and Finance, Elsevier, vol. 30(6), pages 1128-1156, October.

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