IDEAS home Printed from https://ideas.repec.org/a/asi/aeafrj/v4y2014i11p1674-1680id1297.html
   My bibliography  Save this article

Monetary Policy Transmission and Bank Lending In South Korea and Policy Implications

Author

Listed:
  • Yu Hsing

Abstract

This paper tests the bank lending channel for South Korea based on a simultaneous-equation model consisting of the demand for and the supply of bank loans. The three-stage least squares method is employed in empirical work. The demand for bank loans is negatively associated with the lending rate and positively affected by real GDP and the corporate bond yield. The supply of bank loans has a positive relationship with the lending rate and real bank deposits and a negative relationship with the central bank policy rate, the KRW/USD exchange rate and the 10-year U.S. government bond yield. Therefore, this study finds evidence of a bank lending channel for South Korea. Expansionary monetary policy through a lower policy rate or open market purchase of government bonds to increase bank deposits/reserves would increase bank loan supply.

Suggested Citation

  • Yu Hsing, 2014. "Monetary Policy Transmission and Bank Lending In South Korea and Policy Implications," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(11), pages 1674-1680.
    • Handle: RePEc:asi:aeafrj:v:4:y:2014:i:11:p:1674-1680:id:1297
    as

    Download full text from publisher

    File URL: https://archive.aessweb.com/index.php/5002/article/view/1297/1833
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tronzano, Marco, 2018. "Does the Expectations Hypothesis of the Term Structure Hold in Korea after the Asian Financial Crisis? Some Empirical Evidence (1999-2017)," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 71(2), pages 191-226.
    2. Jean Christine A. Armas, 2021. "Is the Bank Lending Channel of Monetary Policy Evident in the Philippines? A Dynamic Panel Data Approach," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 246-269, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:asi:aeafrj:v:4:y:2014:i:11:p:1674-1680:id:1297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robert Allen (email available below). General contact details of provider: https://archive.aessweb.com/index.php/5002/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.