Does bank efficiency affect the bank lending channel in China?

Zuzana Fungáčová, Eeva Kerola and Laurent Weill

Emerging Markets Review, 2023, vol. 55, issue C

Abstract: This work examines the impact of bank efficiency on the bank lending channel in China. Using a sample of 148 Chinese banks over the period 2006–2017, we investigate how the reaction of the loan supply to monetary policy actions depends on a bank's efficiency. We find limited evidence that bank efficiency hampers the effectiveness of monetary policy transmission. In addition, bank efficiency does favor the transmission of monetary policy for banks with low loan-to-deposit ratios. These results suggest that bank efficiency may influence the bank lending channel in certain cases.

Keywords: Chinese banks; Monetary policy; Bank efficiency; Bank lending channel (search for similar items in EconPapers)
JEL-codes: E52 G21 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:55:y:2023:i:c:s1566014122000814

DOI: 10.1016/j.ememar.2022.100964

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