Monetary Policy and Bank Lending in China - Evidence from Loan-Level Data

Dong He and Honglin Wang ()

No 162013, Working Papers from Hong Kong Institute for Monetary Research

Abstract: We investigate how monetary policy in a mixed financial system such as that of China, which is characterized by a juxtaposition of quantity- and price-based policy instruments and the co-existence of regulated and market-determined interest rates, affects bank lending. Using a newly constructed loan-level dataset, we find that loan rates but not loan size are affected by both the regulated and the market-determined interest rates and that loan size is instead affected by an implicit quota that is imposed on aggregate bank lending through window guidance. We interpret this finding to be evidence of credit rationing.

Keywords: Monetary Policy; Bank Lending; The People's Bank of China (PBC) (search for similar items in EconPapers)
JEL-codes: E52 E58 G21 G34 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2013-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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