Do non-financial firms react to monetary policy actions as banks do?

Santiago Carbo () and Rafael López del Paso ()
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Rafael López del Paso: Department of Economic Theory and Economic History, University of Granada

No 05/03, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: The theory of the bank lending channel indicates that financial institutions with larger size, higher capitalisation and higher liquidity present a greater capacity to maintain their levels of credit supply in a situation of monetary contraction. However, there is a paucity of (European) studies that analyse the bank lending channel from the non-financial firms’ perspective. This paper analyzes the impact of monetary policy actions on a large sample of Spanish firms. The empirical evidence for Spain shows that the impact of size, solvency and liquidity are similar for banks and non-financial firms.

Keywords: monetary policy transmission; bank lending channel; liquidity; non-financial firms; banks. (search for similar items in EconPapers)
JEL-codes: E51 G21 D21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-fin, nep-mac and nep-mon
Date: 2005-05-22
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Persistent link: http://EconPapers.repec.org/RePEc:gra:wpaper:05/03

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