How much deposits and equity a bank has influences how a banks’ lending responds to monetary policy. While the responsiveness for the bank lending channel has been well established, this is not the case for the risk-taking channel (RTC). We show in a value-at-risk RTC model that the lending...

How much deposits and equity a bank has influences how a banks’ lending responds to monetary policy. While the responsiveness for the bank lending channel has been well established, this is not the case for the risk-taking channel (RTC). We show in a value-at-risk RTC model that the lending...

This paper studies the heterogeneous response of State-owned enterprises (SOEs) and nonState-owned enterprises (nonSOEs) to the monetary policy. I find that SOEs’ investment declines by 5% - 12% more than nonSOEs after a 100 basis point monetary tightening shock using recent data from China. I...