Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/152530 
Authors: 
Year of Publication: 
2001
Series/Report no.: 
ECB Working Paper No. 96
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
A crucial condition for the existence of a credit channel through bank loans is that monetary policy should be able to change bank loan supply. This paper contributes to the discussion on this issue by presenting empirical evidence from dynamic panel estimations based on a dataset that comprises individual balance sheet information on all German banks. It shows that the average bank reduces its lending more sharply in reaction to a restrictive monetary policy measure the lower its ratio of short-term interbank deposits to total assets. A dependence on its size can only be found if explicitly controlled for this dominating effect and/or if the very small banks are excluded. Overall, the evidence is compatible with the existence of a credit channel
Subjects: 
credit channel
dynamic panel data
financial structure
Monetary policy transmission
JEL: 
C23
E52
G21
Document Type: 
Working Paper

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