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The Role of Bank Balance Sheets in Monetary Policy Transmission: Evidence from Poland

Author

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  • Mariusz Kapuściński

Abstract

This study investigates whether the effects of monetary policy are amplified by its impact on bank balance-sheet strength. Or, in other words, it tests whether the bank-lending channel of the monetary transmission mechanism, as reformulated by Disyatat (2011), works. To this end, panel vector autoregressions with high-frequency identification and univariate panel regressions are applied to data for Poland. Counterfactual exercises show that the analyzed channel accounts for about 23% of a decrease in lending following a monetary policy impulse. This is another piece of evidence showing that the financial accelerator works in both the nonfinancial and the financial sector. In some cases it can make the interplay between monetary and macroprudential policy nontrivial.

Suggested Citation

  • Mariusz Kapuściński, 2017. "The Role of Bank Balance Sheets in Monetary Policy Transmission: Evidence from Poland," Eastern European Economics, Taylor & Francis Journals, vol. 55(1), pages 50-69, January.
    • Handle: RePEc:mes:eaeuec:v:55:y:2017:i:1:p:50-69
    DOI: 10.1080/00128775.2016.1255559
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    Cited by:

    1. Xuanling Ma & Meng Ji, 2023. "Analysis of the risk transmission mechanism of monetary policy in the monetary and financial service sectors from the perspective of asset-liability management," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-16, October.
    2. Mariusz Kapuściński, 2024. "The short-term effects of changes in capital regulations in Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 55(3), pages 255-286.
    3. Peng, Hongfeng & Zhang, Zhichao & Liang, Zimin, 2025. "How does liquidity regulation influence the effect of monetary policy transmission? A structural analysis based on the classified assets of chinese commercial banks," Research in International Business and Finance, Elsevier, vol. 78(C).
    4. Łukasz Below, 2024. "Deconstructing the Fed’s decisions: analysis of the factors influencing monetary policy in the US," Bank i Kredyt, Narodowy Bank Polski, vol. 55(5), pages 623-660.
    5. Marcin Czaplicki, 2022. "Measuring the restrictiveness of (macro)prudential policy: the case of bank capital regulation in Poland," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(3), pages 322-338, September.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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