Identifying the bank lending channel in Brazil through data frequency
AbstractUsing the different response timings of credit demand and supply, we isolate supply shifts after monetary policy shocks. We show that the bank lending channel exists in Brazil: after an increase (decrease) in the basic interest rate (Selic), banks reduce (increase) the quantity of new loans and raise (lower) interest rates. However, contrary to the empirical literature for the US, we find evidence that large banks react more than smaller ones to monetary policy shocks. Results may have important implications for monetary policy transmission in light of the recent wave of concentration in the Brazilian banking industry.
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Bibliographic InfoPaper provided by Department of Economics PUC-Rio (Brazil) in its series Textos para discussão with number 574.
Date of creation: May 2010
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monetary policy transmission; credit markets; bank lending channel. JEL Code: E52; E58;
Find related papers by JEL classification:
- ban - - - - - -
- len - - - - - -
- cha - - - - - -
- JEL - Labor and Demographic Economics - - - - -
- Cod - Mathematical and Quantitative Methods - - - - -
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-26 (All new papers)
- NEP-BAN-2010-06-26 (Banking)
- NEP-CBA-2010-06-26 (Central Banking)
- NEP-MON-2010-06-26 (Monetary Economics)
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