Capital Controls, Domestic Macroprudential Policy and the Bank Lending Channel of Monetary Policy

Bank Capital and Monetary Policy ∗

This paper develops a quantitative, monetary model in which agency problems affect both the relationship between banks and firms as well as that linking banks to their depositors. As a result, bank capital and entrepreneurial net worth jointly determine aggregate investment, and help propagate over time shocks affecting the economy. We find that the effects of monetary policy shocks depend on t...

Bank Lending and Monetary Policy: A Comment

Bank Capital, Agency Costs, and Monetary Policy

Evidence suggests that banks, like firms, face financial frictions when raising funds. The authors develop a quantitative, monetary business cycle model in which agency problems affect both the relationship between banks and firms and the relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine aggregate investment, and are impor...

Capital Controls and Optimal Chinese Monetary Policy

We examine optimal monetary policy under prevailing Chinese policies – including capital controls, nominal exchange rate targets, and costly sterilization of foreign capital inflows. China’s combination of capital controls and exchange rate pegs disrupts its monetary policy, precluding adjustments that could maintain macroeconomic stability following a set of shocks that mirror its experience d...

Is There a Bank Lending Channel of Monetary Policy in Latvia? Evidence from Bank Level Data

2 Introduction 3 1. The Bank Lending Channel 4 1.1 Interest Rate and Credit Channels: a Brief Overview of Theoretical Concepts 4 1.2 Determinants of the Bank Lending Channel 6 2. A Short Description of Latvia's Banking Sector 7 2.1 Importance of the Banking Sector for Latvia's Financial System 7 2.2 Structure of Latvia's Banking Sector 8 3. Discovering Asymmetries in Bank Lending Behaviour 12 3...