Assessing the impact of a policy on reserve requirements: loan-level evidence

Cecilia Dassatti ()
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Cecilia Dassatti: Banco Central del Uruguay

No 2023001, Documentos de trabajo from Banco Central del Uruguay

Abstract: During the first half of 2008, the Central Bank of Uruguay introduced changes in the regulation of reserve and liquidity requirements, increasing the requirements for short-term funding and funding from non-residents as well as introducing a requirement for interbank funding. The combination of these reforms with data that follows all loans granted to non-financial firms in Uruguay, allows me to identify their impact on the supply of credit. Following a difference-in-difference approach, I compare lending before and after the introduction of the policy changes among banks with different degrees of exposition to the funds targeted by the policies. The results suggest that restrictions to short-term finance from banks imply a reduction of credit availability as predicted by the literature.

Keywords: banks; reserve requirements; monetary policy; macroprudential policy (search for similar items in EconPapers)
JEL-codes: E65 G20 G28 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2023
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-mon
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