Does Bank Efficiency Affect the Bank Lending Channel in China?
Copyright policy )Does Bank Efficiency Affect the Bank Lending Channel in China?
This work examines the impact of bank efficiency on the bank lending channel in China. Using a sample of 175 Chinese banks over the period 2006-2017, we investigate how the reaction of the loan supply to monetary policy actions depends on a bank's efficiency. While bank efficiency does not exert an impact on the effectiveness of monetary policy transmission overall, it does favor the transmission of monetary policy for banks with low loan-to-deposit ratios. In addition, the expansion of shadow banking activities has been associated with a positive impact of bank efficiency on monetary policy transmission. These results suggest that bank efficiency may influence the bank lending channel in certain cases.
- University of Strasbourg France
- Bank of Finland Finland
- Moscow State Institute of International Relations Russian Federation
Chinese banks, bank efficiency, ddc:330, monetary policy, G21, bank lending channel, E52
Chinese banks, bank efficiency, ddc:330, monetary policy, G21, bank lending channel, E52
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