Bank Lending Channel

Credit supply and demand changes are mostly unobserved, thus identifying completely the transmission of monetary policy through the credit channel is unfeasible. Bank lending surveys by central banks, however, contain reliable quarterly information on changes in loan conditions due to bank, firm and household balance sheet strength and on changes in loan demand. Using the U.S. and the unique Euro area surveys, we find that the credit channel amplifies a monetary policy shock on GDP and prices, through the balance-sheets of households, firms and banks. For corporate loans, amplification is highest through the bank lending and the borrower's balance sheet channel; for households, demand is the strongest channel.
This is a preprint. The published version [‘Trusting the Bankers: A New Look at the Credit Channel of Monetary Policy’, Matteo Ciccarelli, Angela Maddaloni, José-Luis Peydró, Review of Economic Dynamics, October 2015, 18(4), 979-1002] is available online at: https://www.sciencedirect.com/science/article/pii/S1094202514000726?via%3Dihub
DOI: https://doi.org/10.1016/j.red.2014.11.002

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The increased financial disintermediation that characterizes the Malaysia's financial system since the early 1990s has contributed towards changes in the dynamics of monetary transmission mechanism. Using quarterly data from 1980: 1 to 2005: 4, we found a greater effectiveness of monetary policy during the pre-1990:3 period, but the post-1990:3 period poses much difficulty for the conduct of monetary policy. Innovations

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