The role of uncertainty in the transmission of monetary policy effects on bank lending
نویسندگان
چکیده
In this paper we re-examine commercial banks’ lending behavior taking into account changes in the stance of monetary policy in conjunction with changes in financial sector uncertainty. Using a very large data set covering all banks in the US between 1986–2000, we show that financial uncertainty has an important and significant role in the monetary policy transmission mechanism that varies across bank categories and the strength of banks’ balance sheets. While there is some evidence of a bank lending channel for total loans, there is no evidence of such a channel for commercial and industrial loans in our extended model.
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