Monetary Policy, Bank Capital, and Credit Supply: A Role for Discouraged and Informally Rejected Firms

Alexander Popov

International Journal of Central Banking, 2016, vol. 12, issue 1, 95-141

Abstract: This paper conducts the first empirical study of the bank balance sheet channel using data on discouraged and informally rejected firms, in addition to information on the formal loan-granting process, in eight economies that use the euro or are pegged to it over 2004–7. Consistent with previous studies, I find that lax monetary conditions increase bank credit in general and bank credit to ex ante risky firms in particular, especially for banks with lower capital ratios. Importantly, I find that the results are considerably stronger when data on informal credit constraints are incorporated.

JEL-codes: E32 E51 E52 F34 G21 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Monetary policy, bank capital and credit supply: a role for discouraged and informally rejected firms (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2016:q:1:a:4

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