Monetary Expansion and the Banking Lending Channel

This paper examines the bank lending channel, which considers how monetary authority actions affect the variation of loans. We focus on the BRICS (Brazil, Russia, India, China and South Africa) totalizing 1254 banks from five countries in the period 2000-2012 (totalizing 13 years). The empirical res...

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Bibliographic Details
Published in:PloS one 2016-10, Vol.11 (10), p.e0164338-e0164338
Main Authors: Tabak, Benjamin Miranda, Moreira, Tito Belchior Silva, Fazio, Dimas Mateus, Cavalcanti, André Luiz Cordeiro, Cunha, George Henrrique de Moura
Format: Article
Language:English
Subjects:
Bank deposits
Banking industry
Central banks
Econometrics
Economic crisis
Economic forecasting
Economic growth
Economic models
Federal Reserve monetary policy
Financial Management - methods
Financial statements
Humans
Interest rates
Loans
Macroeconomics
Monetary policy
People and places
Short term
Social Sciences
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Summary:This paper examines the bank lending channel, which considers how monetary authority actions affect the variation of loans. We focus on the BRICS (Brazil, Russia, India, China and South Africa) totalizing 1254 banks from five countries in the period 2000-2012 (totalizing 13 years). The empirical results show that the effect of money supply growth on the growth of loans is non-linear and inverted U-shaped. In this context, our results show empirical evidence expansionary monetary policies do not increase the propensity of economic agents to systematically take greater risks on the market. After a certain level of money stock, increases in the money supply do not lead to increased negotiated credit.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0164338