Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18530
Authors: 
Talavera, Oleksandr
Tsapin, Andriy
Zholud, Oleksandr
Year of Publication: 
2006
Series/Report no.: 
DIW Discussion Papers 637
Abstract: 
Our study investigates the link between bank lending behavior and macroeconomic uncertainty. We develop a dynamic model of a bank's value maximization that results in a negative relationship between loan to capital ratio and macroeconomic uncertainty. This proposition is tested using a panel of Ukrainian banks collected from NBU and covering the period 2003q1-2005q3. The results indicate that banks increase their lending ratios when macroeconomic uncertainty decreases. We demonstrate that our results are robust with respect to the measurement of macroeconomic uncertainty. The reaction of banks to changes in uncertainty is not uniform and depends on bank-specific characteristics.
Subjects: 
Banks
macroeconomic uncertainty
Ukraine
banks' balance sheets
JEL: 
G28
P34
P27
G21
Document Type: 
Working Paper

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