The importance of the bank-lending channel in Estonia: evidence from micro-economic data

Reimo Juks (reimo.juks@hhs.se)

No 2004-6, Bank of Estonia Working Papers from Bank of Estonia

Abstract: The paper studies the importance of the bank-lending channel in Estonia. The results from the descriptive evidence suggest that there is a significant share of bank dependent borrowers in Estonia, but the impact of a monetary policy shock on the loan supply of banks seems to be ambiguous. The empirical analysis provides evidence in favour of the bank-lending channel in Estonia. First, well-capitalized banks seem to experience a smaller outflow of deposits after a monetary contraction. Second, the liquidity position of banks seems to be an important determinant of the loan supply suggesting that more liquid banks are able to maintain their loan portfolios, while less liquid banks must reduce their loan supply after a monetary policy contraction. This finding is consistent with the evidence for the euro area, where liquidity is also the most important determinant of the loan supply.

Keywords: bank lending channel; monetary policy transmission (search for similar items in EconPapers)
JEL-codes: C33 E52 G21 G32 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2004-11-13, Revised 2004-11-11
New Economics Papers: this item is included in nep-fin, nep-fmk, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published

Downloads: (external link)
http://www.eestipank.ee/sites/eestipank.ee/files/p ... ers/2004/_wp_604.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eea:boewps:wp2004-06

Ordering information: This working paper can be ordered from
Estonia bld. 13, 15095 Tallinn, ESTONIA
info@epbe.ee

Access Statistics for this paper

More papers in Bank of Estonia Working Papers from Bank of Estonia Estonia bld. 13, 15095 Tallinn, ESTONIA. Contact information at EDIRC.
Bibliographic data for series maintained by Peeter Luikmel (peeter.luikmel@eestipank.ee).