A simple enquiry on heterogeneous lending rates and lending behaviour

Marco Mazzoli ()

Heterogeneity and monetary policy from Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica

Abstract: This paper contain an empirical analysis on the most relevant determinants of heterogeneity in Italian banks' lending rate and lending behaviour, performed with descriptive statistics and dynamic panel data analysis on the basis of a "mesoeconomic" data set specifically acquired from the Bank of Italy, which contains the data on interest rates, bad debts and credit flows granted by different size categories of banks under the form of different size categories of loans in different geographic areas of the country, for the period 1990 QI -1998 QIV. The purpose of the econometric analyses is twofold: First, investigating the possible disturbances affecting the link between policy rate and interest rates on bank credit; second verify whether the behaviour of the largest bank loans is demand-determined. The results show that the spread between interest rate on the various classes of bank loans and the monetary policy rate is not influenced by the loan size, while it seems to be more affected by proxies for risk and competitive configuration of the banking sector. Furthermore, the behaviour of the largest size class of bank loans does show a pattern consistent with a "demand determined" behaviour.

Keywords: credit; monetary policy. (search for similar items in EconPapers)
JEL-codes: E51 E52 (search for similar items in EconPapers)
Pages: pages 37
Date: 2001-05
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Persistent link: https://EconPapers.repec.org/RePEc:mod:modena:0105

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