Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/87392 
Year of Publication: 
2012
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 12-048/2
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We investigate the differences in banks' responses to monetary policy shocks across bank size, liquidity, and type, i.e., conventional versus Islamic, in Pakistan between 2002:II to 2010:I. We find that following a monetary contraction, small banks with liquid balance sheets cut their lending less than other small banks. In contrast large banks maintain their lending irrespective of their liquidity positions. Islamic banks, though similar in size to small banks, respond to monetary policy shocks as large banks. Hence ceteris paribus the credit channel of monetary policy may weaken when Islamic banking grows in relative importance.
Subjects: 
Monetary policy
Islamic Banking
Pakistan
JEL: 
E5
G2
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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