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The Impact of Monetary Policy on Bank Balance Sheets
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In this article, the authors used disaggregated data on bank balance sheets to provide a test of the lending view of monetary policy transmission and showed that the loan and security portfolios of large and small banks respond differentially to a contraction in monetary policy.Abstract:
This paper uses disaggregated data on bank balance sheets to provide a test of the lending view of monetary policy transmission. We argue that if the lending view is correct, one should expect the loan and security portfolios of large and small banks to respond differentially to a contraction in monetary policy. We first develop this point with a theoretical model; we then test to see if the model's predictions are borne out in the data.read more
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Inside the Black Box: The Credit Channel of Monetary Policy Transmission
TL;DR: The credit channel theory of monetary policy transmission holds that informational frictions in credit markets worsen during tight money periods and the resulting increase in the external finance premium enhances the effects of monetary policies on the real economy as discussed by the authors.
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What Do a Million Observations on Banks Say about the Transmission of Monetary Policy
Anil K. Kashyap,Jeremy C. Stein +1 more
TL;DR: The authors found that the impact of monetary policy on lending is stronger for banks with less liquid balance sheets, i.e., banks with lower ratios of securities to assets, and that this pattern is largely attributable to the smaller banks, those in the bottom 95 percent of the size distribution.
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Bank Size, Bank Capital, and the Bank Lending Channel
Ruby P. Kishan,Timothy P. Opiela +1 more
TL;DR: In this article, the authors provide evidence for a credit channel and a bank lending channel of monetary policy in the United States from 1980 to 1995, and test for bank loan supply shifts by segregating banks according to asset size and capital leverage ratio.
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Does bank capital affect lending behavior
TL;DR: In this paper, the authors investigated the existence of cross-sectional differences in the response of lending to monetary policy and GDP shocks owing to differences in bank capitalization and found that bank capital matters in the propagation of different types of shocks to lending.
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Financial Systems and the Role of Banks in Monetary Policy Transmission in the Euro Area
Michael Ehrmann,Michael Ehrmann,Leonardo Gambacorta,Leonardo Gambacorta,Jorge Martínez-Pagés,Patrick Sevestre,Andreas Worms +6 more
TL;DR: In this article, a comprehensive comparison of the structure of banking and financial markets in the euro area is presented, based on which several hypotheses about the role of banks in monetary policy transmission are developed.
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Journal ArticleDOI
Bank Runs, Deposit Insurance, and Liquidity
TL;DR: The authors showed that bank deposit contracts can provide allocations superior to those of exchange markets, offering an explanation of how banks subject to runs can attract deposits, and showed that there are circumstances when government provision of deposit insurance can produce superior contracts.
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INSIDERS AND OUTSIDERS: The Choice between Informed and Arm's-length Debt
TL;DR: In this paper, the authors argue that while informed banks make flexible financial decisions which prevent a firm's projects from going awry, the cost of this credit is that banks have bargaining power over the firm's profits, once projects have begun.
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The Federal Funds Rate and the Channels of Monetary Transnission
TL;DR: The authors showed that the interest rate on the Federal Funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates, and argued that the reason for this forecasting is that the funds rate sensitively records shocks to the supply of (not the demand for) bank reserves.
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Risk Management: Coordinating Corporate Investment and Financing Policies
Kenneth A. Froot,Kenneth A. Froot,David S. Scharfstein,David S. Scharfstein,Jeremy C. Stein,Jeremy C. Stein +5 more
TL;DR: In this paper, the authors develop a general framework for analyzing corporate risk management policies and argue that if external sources of finance are more costly to corporations than internally generated funds, there will typically be a benefit to hedging: hedging adds value to the extent that it helps ensure that a corporation has sufficient internal funds available to take advantage of attractive investment opportunities.
Related Papers (5)
What Do a Million Observations on Banks Say about the Transmission of Monetary Policy
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