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Non-bank lending and the transmission of monetary policy

Author

Listed:
  • Dominic Cucic
  • Denis Gorea

Abstract

We analyze the role of nonbank lenders in the transmission of monetary policy using data on the universe of unsecured credit to firms and households in Denmark. Nonbanks increase their credit supply after a monetary contraction, both relative to banks and in absolute terms. The nonbank credit expansion is driven by long-term debt funding flowing to nonbanks. The attenuation of the traditional bank lending channel of monetary policy has real effects: nonbank credit insulates corporate investment and household consumption from adverse consequences of monetary contractions.

Suggested Citation

  • Dominic Cucic & Denis Gorea, 2024. "Non-bank lending and the transmission of monetary policy," BIS Working Papers 1211, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1211
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    References listed on IDEAS

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    More about this item

    Keywords

    monetary policy; nonbanks; shadow banks; banks; real effects;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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