Does bank efficiency affect the bank lending channel in China?
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Title:
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Does bank efficiency affect the bank lending channel in China? |
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Author:
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Fungáčová, Zuzana
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Kerola, Eeva
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Weill, Laurent
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Organization:
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Bank of Finland
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Department / Unit:
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Bank of Finland Institute for Emerging Economies (BOFIT)
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Series:
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BOFIT Discussion Papers
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Series number:
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3/2021 |
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Year of publication:
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2021 |
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Publication date:
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8.2.2021 |
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Pages:
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38 |
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Subject (yso):
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pankit; luotonanto; tehokkuus; rahapolitiikka
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Keywords:
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Bofit-kokoelma; Kiina
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JEL:
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E52; G21
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Other keywords:
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Chinese banks; monetary policy; bank efficiency; bank lending channel
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Abstract:
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This work examines the impact of bank efficiency on the bank lending channel in China. Using a sample of 175 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. While bank efficiency does not exert an impact on the effectiveness of monetary policy transmission overall, it does favor the transmission of monetary policy for banks with low loan-to-deposit ratios. In addition, the expansion of shadow banking activities has been associated with a positive impact of bank efficiency on monetary policy transmission. These results suggest that bank efficiency may influence the bank lending channel in certain cases. |
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Table of contents:
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Contents
Abstract ....... 4
1 Introduction ...... 5
2 Monetary policy in China....... 7
3 Data and methodology ....... 10
3.1 Data ........ 10
3.2 Bank efficiency........ 11
3.3 Methodology ....... 12
4 Results ...... 14
4.1 Main estimations........ 14
4.2 Estimations by bank type ....... 15
4.3 Estimations by loan-to-deposit ratio........ 17
4.4 The influence of shadow banking expansion ........ 18
4.5 Alternative efficiency measurement........ 19
5 Conclusion........ 20
References ....... 22
Tables ........ 24 |
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Rights:
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https://helda.helsinki.fi/bof/copyright
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