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The Bank Lending Channel of Monetary Policy: A Review of the Literature and an Agenda for Future Research

  • Mintra Dwarkasing
  • Narly Dwarkasing
  • Steven OngenaEmail author
Chapter

Abstract

As members of the European Monetary Union are characterized by the same monetary policy but yet different institutional settings, this chapter will analyse the different institutional factors among member states of the European Union (EU), and will try to explain how these factors can determine how large the pass-through of monetary policy via the bank lending channel is by reviewing the existing work on this topic. The chapter begins by outlining the concepts of the bank lending channel. The authors relate these concepts to the existing empirical literature and to the institutional differences among EU member states. In the section “International Bank Lending Channels”, they define the notion of an international bank lending channel of monetary policy more formally and summarize the recent empirical literature on this topic. The section “Decomposition of Credit: The Bank Risk Taking Channel” outlines research and findings on the bank risk-taking channel of monetary policy. The section “Conclusion and Future Research” concludes and provides some suggestions for future research.

Keywords

Monetary Policy Banking Sector European Central Bank Bank Lending Islamic Bank 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© The Author(s) 2016

Authors and Affiliations

  • Mintra Dwarkasing
    • 1
  • Narly Dwarkasing
    • 2
  • Steven Ongena
    • 3
    Email author
  1. 1.Department of Business EconomicsErasmus University RotterdamRotterdamNetherlands
  2. 2.Department of Economics, IFSBonn UniversityBonnGermany
  3. 3.Department of Banking and FinanceUniversity of ZurichZürichSwitzerland

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