Heterogeneous "Credit Channels: and Optimal Monetary Policy in a Monetary Union

The growing prospect of European monetary integration has prompted interest in the study of differences in financial systems and their consequences for monetary transmission processes. This paper analyses the case of a monetary union composed of countries with heterogeneous "credit channels". In order to better insulate the economies from the asymmetric effects produced by differences in national financial systems, a money supply process, based on the interest rate on bonds and its spread with respect to the bank lending rate, is proposed.