Identifying the bank lending channel in Brazil through data frequency

Christiano Arrigoni Coelho (), Joao De Mello and Marcio Garcia
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Christiano Arrigoni Coelho: Banco Central do Brasil e Department of Economics PUC-Rio

No 574, Textos para discussão from Department of Economics PUC-Rio (Brazil)

Abstract: Using the different response timings of credit demand and supply, we isolate supply shifts after monetary policy shocks. We show that the bank lending channel exists in Brazil: after an increase (decrease) in the basic interest rate (Selic), banks reduce (increase) the quantity of new loans and raise (lower) interest rates. However, contrary to the empirical literature for the US, we find evidence that large banks react more than smaller ones to monetary policy shocks. Results may have important implications for monetary policy transmission in light of the recent wave of concentration in the Brazilian banking industry.

Keywords: monetary policy transmission; credit markets; bank lending channel. JEL Code: E52; E58 (search for similar items in EconPapers)
Pages: 40p
Date: 2010-05
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mon
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Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Identifying the Bank Lending Channel in Brazil through Data Frequency (2010)
Working Paper: Identifying the bank lending channel in Brazil through data frequency (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:rio:texdis:574

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