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The effect of bank ownership and deposit insurance on monetary policy transmission

Author

Listed:
  • Natalia Andriès

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Steve Billon

    () (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper we develop a theoretical model with a representative bank whose ownership is shared between state and private sector. The bank faces a risk of failure and provides private and public explicit deposit insurance. Banks owned to a larger extent by the government are more able to counteract a restrictive monetary policy because of their capacity to raise additional volume of deposits. Therefore, the greater the state's share in the bank ownership, the less the impact of a monetary tightening on the level of loan supply.

Suggested Citation

  • Natalia Andriès & Steve Billon, 2010. "The effect of bank ownership and deposit insurance on monetary policy transmission," Post-Print halshs-00908863, HAL.
  • Handle: RePEc:hal:journl:halshs-00908863
    DOI: 10.1016/j.jbankfin.2010.07.010
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00908863
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    Cited by:

    1. Ahmet F. Aysan & Mustafa Disli & Huseyin Ozturk, 2017. "Bank Lending Channel In A Dual Banking System:Why Are Islamic Banks So Responsive?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 17/938, Ghent University, Faculty of Economics and Business Administration.
    2. repec:voj:journl:v:63:y:2016:i:3:p:325-338 is not listed on IDEAS
    3. Brei, Michael & Schclarek, Alfredo, 2015. "A theoretical model of bank lending: Does ownership matter in times of crisis?," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 298-307.
    4. Becker, Christian & Ossandon Busch, Matias & Tonzer, Lena, 2017. "Macroprudential policy and intra-group dynamics: The effects of reserve requirements in Brazil," IWH Discussion Papers 21/2017, Halle Institute for Economic Research (IWH).
    5. Voutsinas, Konstantinos & Werner, Richard A., 2011. "New evidence on the effectiveness of "Quantitative Easing" in Japan," CFS Working Paper Series 2011/30, Center for Financial Studies (CFS).

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