Does Bank Efficiency Affect the Bank Lending Channel in China?
Fungáčová, Zuzana; Kerola, Eeva; Weill, Laurent (19.09.2022)
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JulkaisusarjaEmerging Markets Review
NumeroJune : 2023
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-202109131527
This work examines the impact of bank efficiency on the bank lending channel in China. Using a sample of 148 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. We find limited evidence that bank efficiency hampers the effectiveness of monetary policy transmission. In addition, bank efficiency does favor the transmission of monetary policy for banks with low loan-to-deposit ratios. These results suggest that bank efficiency may influence the bank lending channel in certain cases.