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The role of financial intermediaries in monetary policy transmission

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  • Thorsten Beck
  • Andrea Colciago
  • Damjan Pfajfar

Abstract

The recent financial crisis has stimulated theoretical and empirical research on the propagation mechanisms underlying business cycles, in particular on the role of financial frictions. Many issues concerning the interactions between banking and monetary policy forced policy makers to rede.ne economic policies, and motivated macroeconomists to focus on the implications of financial intermediation constraints on asset price fluctuations, the behavior of non-financial firms, households, governments and in turn for real macroeconomic performance. This paper surveys research on the role of financial intermediaries and financial frictions in the transmission of monetary policy and discusses how to design both the new banking regulatory and supervisory structures and monetary policy in order to stabilize the economy. It also serves as an introduction to this special issue.

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Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 420.

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Date of creation: Apr 2014
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Handle: RePEc:dnb:dnbwpp:420
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Keywords: Financial Intermediation; DSGE models; Financial Frictions;

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Find related papers by JEL classification:
  • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
  • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
  • G20 - Financial Economics - - Financial Institutions and Services - - - General

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Cited by:

  1. Sonali Das, 2015. "Monetary Policy in India; Transmission to Bank Interest Rates," IMF Working Papers 15/129, International Monetary Fund.
  2. Jochen Mierau & Mark Mink, 2016. "A descriptive model of banking and aggregate demand," DNB Working Papers 500, Netherlands Central Bank, Research Department.
  3. Gabriele Galati & Richhild Moessner, 2014. "What do we know about the effects of macroprudential policy?," DNB Working Papers 440, Netherlands Central Bank, Research Department.
  4. Beck, Günter Wilfried & Kotz, Hans-Helmut & Zabelina, Natalia, 2016. "Lost in translation? ECB's monetary impulses and financial intermediaries' responses," SAFE White Paper Series 36, Goethe University Frankfurt, Research Center SAFE - Sustainable Architecture for Finance in Europe.

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