publication . Research . Preprint . Article . 2015

Reserve requirements and the bank lending channel in China

Zuzana Fungáčová; Riikka Nuutilainen; Laurent Weill;
Open Access English
  • Published: 21 Sep 2015
  • Publisher: Helsinki: Bank of Finland, Institute for Economies in Transition (BOFIT)
Abstract
This paper examines how reserve requirements influence the transmission of monetary policy through the bank lending channel in China while also taking into account the role of bank ownership. The implementation of Chinese monetary policy is characterized by the reliance on the reserve requirements as a regular policy tool with frequent adjustments. Using a large dataset of 170 Chinese banks for the period 2004–2013, we analyze the reaction of loan supply to changes in reserve requirements. We find no evidence of the bank lending channel through the use of reserve requirements. We observe, nonetheless, that changes in reserve requirements influence loan growth of...
Subjects
free text keywords: E52, G21, P52, Chinese banks; bank lending channel; bank ownership, ddc:330, jel:E52, jel:G21, jel:P52, Economics, Reserve requirement, Quantitative easing, Macroeconomics, Bank rate, Credit channel, Economic policy, Monetary reform, Official cash rate, Forward guidance, Financial system, Chinese financial system
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publication . Research . Preprint . Article . 2015

Reserve requirements and the bank lending channel in China

Zuzana Fungáčová; Riikka Nuutilainen; Laurent Weill;