BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 8/2009:
The role of banks in monetary policy transmission: Empirical evidence from Russia
Tuuli Juurikkala ()
, Laura Solanko ()
and Alexei Karas ()
Abstract: This paper focuses on the role of the banking sector in
monetary policy transmission in an emerging economy with a rapidly
developing financial system. Specifically, we exam whether the central
bank's monetary policy stance affects banks' lending behaviour. Based on a
comprehensive quarterly dataset on all Russian banks from 1Q1999 to 1Q2007,
we find evidence for the existence of a bank lending channel in Russia.
Contrary to several studies on developed economies, the level of a bank's
capitalization matters for the transmission process. Better capitalized
banks are less likely to adjust their lending practices following a change
in the monetary policy stance.
Keywords: monetary policy transmission; bank lending; Russia; (follow links to similar papers)
JEL-Codes: C23; E44; E52; G21; (follow links to similar papers)
27 pages, July 6, 2009
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