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What drives bank lending policy? The evidence from bank lending survey for Poland

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  • Ewa Wróbel

    (Narodowy Bank Polski)

Abstract

Based on aggregate data from the lending survey for Poland and using a series of structural vector autoregressive models, we show that credit market sentiments, bank capital position and quality of banks’ balance sheets are the most important drivers of bank lending standards, terms and conditions for the corporate sector. Also, we demonstrate that albeit with some delay, monetary policy shocks affect bank lending policy and additionally have some bearing on credit market sentiments, quality of bank balance sheets and competition. Innovations to the business sector activity and to demand for credit play a minor role for bank lending policy.

Suggested Citation

  • Ewa Wróbel, 2022. "What drives bank lending policy? The evidence from bank lending survey for Poland," NBP Working Papers 352, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:352
    as

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    References listed on IDEAS

    as
    1. Lown, Cara & Morgan, Donald P., 2006. "The Credit Cycle and the Business Cycle: New Findings Using the Loan Officer Opinion Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(6), pages 1575-1597, September.
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    3. Kaiji Chen & Patrick Higgins & Tao Zha, 2021. "Cyclical Lending Standards: A Structural Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 42, pages 283-306, October.
    4. Martin Ruckes, 2004. "Bank Competition and Credit Standards," The Review of Financial Studies, Society for Financial Studies, vol. 17(4), pages 1073-1102.
    5. Michael Fishman & Jonathan Parker & Ludwig Straub, 2019. "A Dynamic Theory of Lending Standards," 2019 Meeting Papers 1344, Society for Economic Dynamics.
    6. Jonathan Swarbrick, 2019. "Lending Standards, Productivity and Credit Crunches," Staff Working Papers 19-25, Bank of Canada.
    7. Maryam Farboodi & Péter Kondor, 2020. "Rational Sentiments and Economic Cycles," NBER Working Papers 27472, National Bureau of Economic Research, Inc.
    8. John A. Weinberg, 1995. "Cycles in lending standards?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 1-18.
    9. Gete, Pedro, 2018. "Lending standards and macroeconomic dynamics," Working Paper Series 2207, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bank credit; lending standards; terms and conditions; structural vector autoregressive model;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • 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

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