Borrowers' financial constraints and the transmission of monetary policy
Subtitle: evidence from financial conglomerates
By: Adam B. Ashcraft and Murillo Campello.
Contributors: Campello, Murillo.; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 153; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 153.
Publisher: Federal Reserve Bank of New York
Published: 2002
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Bank loans.; Bank holding companies.
Description: "Building on recent evidence concerning the functioning of internal capital markets in financial conglomerates, we conduct a novel test of the balance-sheet channel of monetary policy.  Specifically, we investigate how the response of lending to monetary policy differs across small banks that are affiliated with the same bank holding company but operate in different geographical areas.  These banks face similar constraints in accessing internal and external sources of funds, but have different pools of borrowers.  Because they typically concentrate their lending with small local businesses, we can exploit cross-sectional differences in local economic indicators at the time of a policy shock to study whether the strength of borrowers' balance sheets affects the response of bank lending.  We find evidence that the negative response of bank loan growth to a monetary contraction is significantly stronger when borrowers have weaker balance sheets"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 3/1/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.