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An Analysis on Factors Affecting Loan Demand and Supply in Korea (in Korean)

Author

Listed:
  • Jong-Ku Kang

    (Financial & Monetary Economics Team, Economic Research Institute, the Bank of Korea)

  • Hosung Lim

    (Financial & Monetary Economics Team, Economic Research Institute, the Bank of Korea)

Abstract

This paper conducted an empirical estimation for loan amounts and loan interest rates of Korean commercial banks, and then derived loan demand and supply functions from the estimation. It is found that the call rate, the capital adequacy rate and the credit spread are affecting the loan market as supply side factors, while the rates of increase in CPI and the house price index act as demand side factors. In the corporate loan market, the influence of demand factors has been greater than that of supply factors. On the contrary, the household loan market has been influenced more greatly by demand factors than by supply factors. Meanwhile, Saving banks loans have been affected mostly by supply factors. The result of analysis on loan demand and supply functions implies that the slopes of demand curve and supply curve in the loan market have become steep since 2012.

Suggested Citation

  • Jong-Ku Kang & Hosung Lim, 2015. "An Analysis on Factors Affecting Loan Demand and Supply in Korea (in Korean)," Working Papers 2015-17, Economic Research Institute, Bank of Korea.
    • Handle: RePEc:bok:wpaper:1517
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    More about this item

    Keywords

    Loan supply; Loan demand; Financial policy;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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