Banks' regulatory buffers, liquidity networks and monetary policy transmission

Based on a quarterly regulatory dataset for German banks from 1999 to 2004, this paper analyzes the effects of banks’ regulatory capital on the transmission of monetary policy in a system of liquidity networks. The dynamic panel regression results provide evidence in favor of the bank capital channel theory. Banks holding less regulatory capital and less interbank liquidity react more restrictively to a monetary tightening than their peers.

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Year of publication:	2006
Authors:	Merkl, Christian ; Stolz, Stéphanie
Institutions:	Deutsche Bundesbank
Subject:	Monetary policy transmission \| Bank lending channel \| Bank capital channel \| Liquidity networks

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Extent:	application/pdf
Series:	Discussion Paper Series 2: Banking and Financial Studies.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 2006,06
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; G21 - Banks; Other Depository Institutions; Mortgages ; G28 - Government Policy and Regulation ; C23 - Models with Panel Data
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005082776