scholarly journals Credit Supply and Monetary Policy: Identifying the Bank Balance-Sheet Channel with Loan Applications

2012 ◽  
Vol 102 (5) ◽  
pp. 2301-2326 ◽  
Author(s):  
Gabriel Jiménez ◽  
Steven Ongena ◽  
José-Luis Peydró ◽  
Jesús Saurina
Keyword(s):  
Monetary Policy ◽  
Firm Heterogeneity ◽  
Supply And Demand ◽  
Balance Sheet ◽  
Economic Conditions ◽  
Balance Sheet Channel ◽  
Loan Demand ◽  
Loan Supply ◽  
Credit Restriction ◽  
The Impact

We analyze the impact of monetary policy on the supply of bank credit. Monetary policy affects both loan supply and demand, thus making identification a steep challenge. We therefore analyze a novel, supervisory dataset with loan applications from Spain. Accounting for time-varying firm heterogeneity in loan demand, we find that tighter monetary and worse economic conditions substantially reduce loan granting, especially from banks with lower capital or liquidity ratios; responding to applications for the same loan, weak banks are less likely to grant the loan. Finally, firms cannot offset the resultant credit restriction by applying to other banks. (JEL E32, E44, E52, G21, G32)

scholarly journals DUAL MONETARY INSTRUMENTS’ IMPACT ON THE PERFORMANCE AND STABILITY OF JAKARTA ISLAMIC INDEX

2018 ◽  
Vol 3 (2) ◽  
pp. 315-348
Author(s):  
Bazari Azizi
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Capital Market ◽  
Balance Sheet ◽  
Monetary Policies ◽  
Monetary System ◽  
Balance Sheet Channel ◽  
Monetary Policy Transmission Mechanism ◽  
The Stability ◽  
The Impact

The monetary instruments and capital market are closely related as these tools are operating in the money market. The influence of the monetary policy to the stocks and indexes’ performance has been the research interest in the previous literature. The monetary policies along with its’ instruments are transmitted not only in banking lending channel to affect the economic growth but also in the balance sheet channel. However, the conventional tools and policies are not adhering the sharia tenets. Hence, the sharia-compliance monetary system is emanated in Muslim majority countries, including Indonesia. Additionally, this establishment of policy is coupled with the emergence of the Islamic capital market in Indonesia. Thus, the analysis of the impact of either Islamic or conventional monetary system on the Islamic capital market in Indonesia that represented by the Jakarta Islamic Index (JII) is essential to look at its’ furthers effect on financial market growth.This study examines the impact of the Islamic and conventional monetary variables on the performance of the Jakarta Islamic Index in Indonesia. It also investigates the stability of the JII under the occurrence of the shock derived from the monetary instruments. Monthly closing value of the JII, conventional or interest rate, Islamic policy rate, and monetary base are assessed to address the research objectives in this paper. This study employs the VAR-VECM and Granger analysis to analyse the phenomenon. The monetary policy transmission mechanism through the financial market channel is the main channel that will be investigated in this paper. The study comprises of introduction, literature review, methodology, and lastly the discussion and conclusion.

scholarly journals ASSESSMENT OF DIRECTION FOR COORDINATION OF MONETARY REGULATION OF INVESTMENT IN THE INTEGRATION UNIONS

2021 ◽  
pp. 27-36
Author(s):  
Marina Zelenkevich ◽  
Natallia Bandarenka
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Supply And Demand ◽  
Central Banks ◽  
Eurasian Economic Union ◽  
National Bank ◽  
Economic Union ◽  
The Republic ◽  
The Impact ◽  
Method Of Correlation

In the context of globalization and regionalization, central banks pursuing monetary policy in the country at the same time become subjects of monetary regulation within the framework of the integrational associations of which they are members. The purpose of the article is to assess the impact of monetary policy on investment and economic growth in integration unions and determine the appropriateness of their coordination. To achieve the goal, a method of correlation-regression analysis is proposed, one which allows for the identifying and assessing of the degree of influence of certain directions of monetary policy of the countries of the integration association on the indicators of investment and economic growth. As a result of the analysis, the expediency of coordination and implementation of a coordinated policy of central banks to stimulate the deposit and credit policy of commercial banks was proved, which positively affects the characteristics of supply and demand in the integrated investment market. The assessment of the directions of the coordination of monetary investments regulation was carried out on the example of an integration association - the Union of Belarus and Russia and can be extended to other integration associations with the participation of Belarus, in particular, to the monetary interaction of countries within the Eurasian Economic Union. The analysis is based on the statistical data of the National Statistical Committee and the National Bank of the Republic Belarus, the EAEU Department of Statistics, as well as statistical information from the Central Bank of Russia and the Union of Russia and Belarus.

The Channels of Transmission of Monetary Policy

2021 ◽  
pp. 45-88
Author(s):  
Juan Antonio Morales ◽  
Paul Reding
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Asset Price ◽  
Balance Sheet ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
The Interest Rate ◽  
The Impact ◽  
Transmission Of Monetary Policy

This chapter explores the monetary transmission mechanism (MTM) in low financial development countries (LFDCs). It successively discusses the interest rate, asset price, bank credit, balance sheet, expectations, and real balance channels. For each channel, conceptual aspects about how it operates, how it transmits monetary policy impulses to the economy’s financial and real spheres, are first presented. Next, the impact of the specificities of LFDCs on the channel’s strength and reliability are examined and the available empirical evidence is surveyed. The chapter concludes with a global assessment of the effectiveness of the monetary transmission mechanism in LFDCs. Evidence points to a transmission mechanism that is effective although not very strong, and possibly also more uncertain than in advanced and emerging market countries.

Does bank capital affect the monetary policy transmission mechanism? A case study of Emerging Market Economies (EMEs)

2019 ◽  
Vol 06 (02) ◽  
pp. 1950019
Author(s):  
Zia Abbas ◽  
Syed Faizan Iftikhar ◽  
Shaista Alam
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Transmission Mechanism ◽  
Bank Capital ◽  
Monetary Policy Transmission ◽  
Policy Transmission ◽  
Loan Supply ◽  
Monetary Policy Transmission Mechanism ◽  
The Impact

The objective of this study is to investigate the impact of bank capital on monetary policy transmission mechanism during the period from 2010 to 2016 for 20 Emerging Market Economics (EMEs) by using the two-step system generalized method of moments (GMM). The coefficient of excess capital in low-asset countries is found to be negative which reveals the importance of excess capital for the effectiveness of monetary transmission. However, the study could not find the significance of excess capital for high-asset countries as they may afford the risky way to generate their income by increasing the loan supply.

The balance sheet channel of monetary policy: the panel evidence of Egypt

2016 ◽  
Vol 10 (3) ◽  
pp. 286-305 ◽  
Author(s):  
Mohamed Aseel Shokr ◽  
Zulkefly Abdul Karim ◽  
Mohd Azlan Shah Zaidi
Keyword(s):  
Monetary Policy ◽  
Balance Sheet ◽  
Balance Sheet Channel

Euro-area GDP growth will slow in 2019

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Balance Sheet ◽  
Lower Growth ◽  
Content Type ◽  
Large Size ◽  
Area Growth ◽  
Risks Assessment ◽  
European Parliament Elections ◽  
The Impact

Subject Reasons behind the euro-area growth slowdown. Significance In its Winter 2019 interim forecasts, the European Commission downgraded its expectations for euro-area growth to 1.3% and 1.6% for 2019 and 2020, respectively, from 1.9% and 1.7% three months earlier. At its January meeting, the ECB Governing Council foreshadowed lower growth, shifting its risks assessment, saying that downside risks will dominate. Impacts The European Parliament elections could have a destabilising impact on growth in some countries. Monetary policy can do nothing to cushion the impact of lower growth caused by trade conflict. In case of recession, monetary policy stimulus will be constrained by the large size of the ECB balance sheet.

Research on Influence of the Balance Sheet Channel Effect on Enterprise Investment

2014 ◽  
Vol 998-999 ◽  
pp. 1610-1613
Author(s):  
Jing Jing Fu
Keyword(s):  
Balance Sheet ◽  
Subprime Mortgage ◽  
Coverage Ratio ◽  
Corporate Influence ◽  
Channel Effect ◽  
Balance Sheet Channel ◽  
Mortgage Crisis ◽  
Before And After ◽  
Channel Effects ◽  
The Impact

In this paper, we selected 98 listed companies as simples and by studying their investment behavior before and after the U.S. subprime mortgage crisis in 2008, we make an empirical analysis of the effect of the balance sheet channel on China's enterprises. Adopt changes in net assets due to changes in asset prices as a variable measure of the balance sheet channel effects, reflecting the impact of the mechanism of direct investment. The results show that: before the crisis, the balance sheet channel effect for low interest coverage ratio greater corporate influence; after the crisis, the impact of the mechanism for the enterprise becomes low interest coverage ratio is not significant, but the impact of high interest coverage ratio of enterprises is still significant, and the impact is greater than before.

Absence of price pressures checks central bank hawks

2017 ◽  
Keyword(s):  
Monetary Policy ◽  
Regime Change ◽  
Emerging Market ◽  
Balance Sheet ◽  
Policy Regime ◽  
Bank Of Canada ◽  
Content Type ◽  
Full Swing ◽  
The Impact ◽  
First Time

Subject The impact of persistently low inflation on the pace of monetary policy 'regime change' in most countries. Significance The US Federal Reserve (Fed) published the minutes of its June 14 interest rate-setting meeting on July 5, showing increasing divisions over the pace of tightening as inflation eases. The Fed remains committed to starting to shrink its 4.5-trillion-dollar balance sheet this year, but there are disagreements over the timing of both the unwinding and further rate hikes. Subdued inflation is also constraining the ECB’s plans to withdraw its monetary stimulus, despite speculation about a ‘regime change’ in monetary policy driving the yield on the benchmark 10-year Bund to its highest point since January 2016. Impacts The yield on 10-year US Treasuries has risen since June but remains below its mid-March level when ‘reflation trading’ was in full swing. Emerging market bond funds are vulnerable to tighter policy and suffered outflows for the first time this year in the week ending July 5. The average world oil price has fallen by more than 10% since May to below 50 dollars a barrel amid concerns of a supply glut. The Bank of Canada may raise rates for the first time in nearly seven years on July 12, while the Fed chair will testify before Congress.

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