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Do non-financial firms react to monetary policy actions as banks do?

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  • Santiago Carbó Valverde

    ()
    (Department of Economic Theory and Economic History, University of Granada)

  • Rafael López del Paso

    ()
    (Department of Economic Theory and Economic History, University of Granada)

Abstract

The theory of the bank lending channel indicates that financial institutions with larger size, higher capitalisation and higher liquidity present a greater capacity to maintain their levels of credit supply in a situation of monetary contraction. However, there is a paucity of (European) studies that analyse the bank lending channel from the non-financial firms’ perspective. This paper analyzes the impact of monetary policy actions on a large sample of Spanish firms. The empirical evidence for Spain shows that the impact of size, solvency and liquidity are similar for banks and non-financial firms.

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File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers05_03.pdf
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Bibliographic Info

Paper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 05/03.

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Length: 31 pages
Date of creation: 22 May 2005
Date of revision:
Handle: RePEc:gra:wpaper:05/03

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Keywords: monetary policy transmission; bank lending channel; liquidity; non-financial firms; banks.;

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