Monetary Policy Transmission in Emerging Asia: The Role of Banks and the Effects of Financial Globalization
Nasha Ananchotikul and
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Dulani Seneviratne: International Monetary Fund
PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research
Given the heavy reliance on bank lending as the main source of financing in most Asian economies, banks could potentially play a pivotal role in monetary policy transmission. However, we find that Asia?s bank lending channel or, more broadly, credit channel of domestic monetary policy is not very strong at the aggregate level. Using bank-level data for nine Asian economies during 2000?2013, we show that heterogeneity of bank characteristics (e.g., ownership type, financial position), degree of foreign bank penetration of the domestic banking sector, and global financial conditions all have a bearing on the response of domestic credit to changes in domestic monetary policy, and may account for the apparently weak credit channel at aggregate level.
Keywords: Monetary policy transmission; bank lending channel; financial globalization (search for similar items in EconPapers)
JEL-codes: E50 E52 E59 (search for similar items in EconPapers)
Date: 2015-11, Revised 2015-11
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Working Paper: Monetary Policy Transmission in Emerging Asia; The Role of Banks and the Effects of Financial Globalization (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pui:dpaper:7.
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