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The bank lending channel and Swiss banking: a survey-based approach

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  • Banu Simmons-Sueer

Abstract

This paper investigates the issue of the bank-lending channel in Switzerland. Using survey data to reflect loan supply and demand factors, we investigate the dynamic behaviour of aggregate loans in a VAR setting. Our findings indicate that higher interest rates lead to tightened loan approvals, and liquidity is a binding constraint as the contraction in deposits exceeds the reduction in loan growth following a monetary shock. Thus, banks' actions seem to aggravate (ameliorate) the initial effects of higher (lower) interest rates on aggregate demand.

Suggested Citation

  • Banu Simmons-Sueer, 2014. "The bank lending channel and Swiss banking: a survey-based approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    • Handle: RePEc:taf:irapec:v:28:y:2014:i:1:p:45-63
    DOI: 10.1080/02692171.2013.826636
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    References listed on IDEAS

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    1. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    2. Leonardo Gambacorta & Paolo Emilio Mistrulli, 2003. "Bank Capital and Lending Behaviour: Empirical Evidence for Italy," Temi di discussione (Economic working papers) 486, Bank of Italy, Economic Research and International Relations Area.
    3. repec:zbw:bofrdp:2009_002 is not listed on IDEAS
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