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Risk-Taking Channel of Monetary Policy in Iranian Banking System (in Persian)

Author

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  • Shahchera, Mahshid

    (Iran)

  • mirhashemi, simin

    (Iran)

  • ahmadian, iman

    (Iran)

Abstract

Despite the recent attention to the potential impact of monetary policy on bank risk taking incentives, large research typically concentrated on the relationship between monetary policy instance and availability of bank credit and didn’t provide a model that import the bank risk taking incentives. This paper attempts to fill this gap in existing studies. For this purpose, we considered the bank risk taking index along with other indicators (such as size, liquidity and capitalization) that traditionally has been applied in the bank lending channel studies to assess the ability and willingness of banks to supply new loans. Thus, bank lending channel examination of Iran`s banking network through banking risk is the aim of this paper, For this purpose, the index of bank risk taking instance will be used in the common monetary transmission mechanism and the generalized method of moments (GMM) will be used to estimate the model. The results show that bank risks have negative effects on their lending and also the interaction between bank risk index and monetary policy, as expected, is negative.

Suggested Citation

  • Shahchera, Mahshid & mirhashemi, simin & ahmadian, iman, 2015. "Risk-Taking Channel of Monetary Policy in Iranian Banking System (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 8(24), pages 285-303, July.
    • Handle: RePEc:mbr:jmbres:v:8:y:2015:i:24:p:285-303
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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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