Does non-bank fintech development hurt the effect of targeted monetary policy tools? Micro evidence from China

Xi Wang and Yanfei Tang

Finance Research Letters, 2024, vol. 62, issue PA

Abstract: Since the financial crisis, central banks have implemented unconventional monetary policies, while fintech has developed rapidly and reshaped the credit market. Using firm data from China, this paper empirically tests whether the development of non-bank fintech influences the effect of targeted monetary policy tools. We find that targeted reserve requirement ratio (RRR) cuts in China expand the borrowing amounts of targeted micro and small enterprises (MSEs), but have no effect on their borrowing costs. Moreover, non-bank fintech increases the effect of targeted RRR cuts on MSEs' borrowing amounts, while it does not change the policy effect on borrowing costs.

Keywords: Targeted reserve requirement ratio cuts; Micro and small enterprises; Enterprises’ borrowing; Fintech (search for similar items in EconPapers)
JEL-codes: E42 G21 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pa:s154461232400151x

DOI: 10.1016/j.frl.2024.105121

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