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Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
This dissertation examines the role of bank structure on the effectiveness of monetary policy. Using time series data for U.S. banks, I examine the varying effect of monetary policy on bank lending for the period 1976-2003. It is found that as the banking industry gets more concentrated (through mergers and acquisitions), the effect of monetary policy transmission (through open market operations) is being mitigated. That was the result of the deregulation of the banking sector that took place in the first half of the 1990s which led to an unprecedented wave of consolidation in the banking sector. Then I investigate the lending channel evidence at the bank level. That is, how important is the cross-sectional differences in the way that banks with varying characteristics respond to policy shocks. Three bank characteristics are highlighted: bank size, liquidity and capitalization. It is found that large, more liquid, and well capitalized banks are more impervious to changes in monetary policy than other banks. Real estate loans, agriculture, commercial and industrial (C & I), and consumer loans are analyzed. The size of the bank is found to be most crucial for real estate lending, where small banks are much more sensitive to changes in the federal funds rate compared to large banks. The effect is comparatively less pronounced for C & I and consumer lending and largely disappears when it comes to agriculture lending. Finally, the question of monetary policy asymmetry is examined. As expected, monetary policy has more effect on bank lending when it tightens than when it eases interest rates. This is found to be the case for all types of loans except for real estate loans, where a decline of FFR entices more real estate lending than a rise.
Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
This dissertation examines the role of bank structure on the effectiveness of monetary policy. Using time series data for U.S. banks, I examine the varying effect of monetary policy on bank lending for the period 1976-2003. It is found that as the banking industry gets more concentrated (through mergers and acquisitions), the effect of monetary policy transmission (through open market operations) is being mitigated. That was the result of the deregulation of the banking sector that took place in the first half of the 1990s which led to an unprecedented wave of consolidation in the banking sector. Then I investigate the lending channel evidence at the bank level. That is, how important is the cross-sectional differences in the way that banks with varying characteristics respond to policy shocks. Three bank characteristics are highlighted: bank size, liquidity and capitalization. It is found that large, more liquid, and well capitalized banks are more impervious to changes in monetary policy than other banks. Real estate loans, agriculture, commercial and industrial (C & I), and consumer loans are analyzed. The size of the bank is found to be most crucial for real estate lending, where small banks are much more sensitive to changes in the federal funds rate compared to large banks. The effect is comparatively less pronounced for C & I and consumer lending and largely disappears when it comes to agriculture lending. Finally, the question of monetary policy asymmetry is examined. As expected, monetary policy has more effect on bank lending when it tightens than when it eases interest rates. This is found to be the case for all types of loans except for real estate loans, where a decline of FFR entices more real estate lending than a rise.
Author: United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Domestic Monetary Policy Publisher: ISBN: Category : Government publications Languages : en Pages : 304
Author: Mr.Carlo Cottarelli Publisher: International Monetary Fund ISBN: 1451845766 Category : Business & Economics Languages : en Pages : 66
Book Description
The stickiness of bank lending rates with respect to money market rates is often regarded as an obstacle to the smooth transmission of monetary policy impulses. Yet, no systematic measure of the different degree of lending rate stickiness across countries has been attempted. This paper provides such a measure. It also relates the different degree of lending rate stickiness to structural features of the financial system, such as the existence of barriers to competition, the degree of development of financial markets, and the ownership structure of the banking system. Thus, the paper provides further evidence on the relationship between structural financial policies and monetary policy, as well as on the relevance of credit markets for the monetary policy transmission mechanism. The role of administered discount rates in speeding up the. adjustment of lending rates is also discussed.
Author: Mr.John C Bluedorn Publisher: International Monetary Fund ISBN: 1484323378 Category : Business & Economics Languages : en Pages : 39
Book Description
We present new evidence on how heterogeneity in banks interacts with monetary policy changes to impact bank lending. Using an exogenous policy measure identified from narratives on FOMC intentions and real-time economic forecasts, we find much greater heterogeneity in U.S. bank lending responses than that found in previous research based on realized federal funds rate changes. Our findings suggest that studies using realized monetary policy changes confound the monetary policy’s effects with those of changes in expected macrofundamentals. We also extend Romer and Romer (2004)’s identification scheme, and expand the time and balance sheet coverage of the U.S. banking sample.
Author: Ali Termos Publisher: ISBN: Category : Languages : en Pages : 104
Book Description
Keywords: Bank lending Channel, Monetary Policy Transmission, dynamic panel data model, Cointegration test, System GMM, Banking Consolidation.
Author: Mr.Giovanni Dell'Ariccia Publisher: International Monetary Fund ISBN: 1484381130 Category : Business & Economics Languages : en Pages : 41
Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author: Mr.Giovanni Dell'Ariccia Publisher: International Monetary Fund ISBN: 148433373X Category : Business & Economics Languages : en Pages : 41
Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author: Board of Governors of the Federal Reserve System Publisher: ISBN: 9780894991967 Category : Banks and Banking Languages : en Pages : 0
Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author: Charles Albert Eric Goodhart Publisher: MIT Press ISBN: 9780262071673 Category : Business & Economics Languages : en Pages : 560
Book Description
As economic advisor to the Bank of England for many years, C. A. E. Goodhart is uniquely positioned to assess the role of the central bank in the modern financial system. This book brings together twenty-one of his previously published articles dealing with the changing functions of central banks over time, recent efforts to maintain price stability, and debates over specific financial regulation proposals in the UK. Although the current day-to-day operations of central banks are subject to continuous comment and frequent criticism, their structural role within the economic system as a whole has generally been accepted without much question, despite several attempts by economists in recent decades to challenge the value of the institution. C. A. E. Goodhart brings his knowledge of both the theoretical arguments and the actual working of central banks to bear in these essays. Part I looks at the general purposes and functions of central banks within the financial system and their evolution over time. Part II concentrates on the current objectives and operations of central banks, and the maintenance of price stability in particular. Part III analyzes the broader issues of financial regulation.
Author: N. Gregory Mankiw Publisher: University of Chicago Press ISBN: 0226503100 Category : Business & Economics Languages : en Pages : 358
Book Description
In Monetary Policy, leading monetary economists discuss applied aspects of monetary policy and offer practical new research on the timing, magnitude, and channels of central banking actions. Some of the papers in this volume evaluate a variety of policy rules based on monetary aggregates, nominal income, commodity prices, and other economic variables. Others analyze price behavior and inflation, particularly the short-run behavior of prices. Still others examine the monetary transmission mechanism—the channel through which the central bank's actions affect spending on goods and services—with a special focus on the reduction in bank lending that must accompany a reduction in reserves. This new research will be of special interest to central bankers and academic economists.
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Author: United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Domestic Monetary Policy
Author: Mr.Carlo Cottarelli
Author: Mr.John C Bluedorn
Author: Ali Termos
Author: Mr.Giovanni Dell'Ariccia
Author: Mr.Giovanni Dell'Ariccia
Author: Board of Governors of the Federal Reserve System
Author: Charles Albert Eric Goodhart
Author: N. Gregory Mankiw