Is There a Bank Lending Channel of Monetary Policy in Spain?

Ignacio Hernando and Jorge Martínez Pagés
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Jorge Martínez Pagés: Banco de España

No 117, Working Papers from Banco de España

Abstract: This paper uses panel data on banks, for the period 1991-98, to test the existence of a banklending channel in the Spanish economy. In order to distinguish between loan demand and supply movements, several exercises are performed. First, we analyse the differential responses, to monetary policy changes, of bank lending by banks with different size, liquidity and capitalisation. Second, we analyse the response to an exogenous deposit-reducing shock (a taxinduced shift from deposits to mutual fund shares). As this involves a pure loan supply shock, it best solves the above-mentioned identification problem. Our results are mostly against the existence of a bank-lending channel in the period under analysis. This result appears to be related to the important role of many small banks as collectors of savings, meaning they have a large volume of resources available for lending.

Keywords: bank lending; bank funding; monetary transmission mechanism (search for similar items in EconPapers)
JEL-codes: C23 E44 E52 G21 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2001
References: View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Related works:
Working Paper: Is there a bank lending channel of monetary policy in Spain? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0117

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