The Relevance of the Bank Lending Channel in Brazil

Fernando Oliveira and Renato da Motta Andrade Neto ()
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Renato da Motta Andrade Neto: Ibmec RJ

Brazilian Review of Finance, 2008, vol. 6, issue 3, 359-411

Abstract: This paper evaluates the existence of an active bank-lending channel of monetary policy. The empirical analysis is based on a two-step regression that tests how the liquidity of commercial banks reacted to monetary shocks. We use balance sheet information of 293 commercial banks from July 1994 to December 2005. Our main conclusion is that the banklending channel is relevant for our understanding of the monetary transmission mechanism in Brazil. This result is found when monetary shocks are identified by the SELIC rate endogenously or exogenously or by required reserves over demand deposits.

Keywords: bank-lending channel; credit channel; monetary transmission mechanism. (search for similar items in EconPapers)
JEL-codes: E50 E52 E58 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:6:y:2008:i:3:p:359-411

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