Bank losses, monetary policy and financial stability : evidence on the interplay from panel data /

Bank losses, monetary policy and financial stability : evidence on the interplay from panel data /

Saved in:

Bibliographic Details
Author / Creator:	Nier, Erlend.
Imprint:	Washington, D.C. : International Monetary Fund, ©2008. [Washington, District of Columbia] : International Monetary Fund, 2008. ©2008
Description:	1 online resource (32 pages) : illustrations
Language:	English
Series:	IMF working paper ; WP/08/232 IMF working paper ; WP/08/232.
Subject:	Bank failures -- Econometric models. Monetary policy -- Econometric models. Economic stabilization -- Econometric models. Bank failures -- Econometric models. Economic stabilization -- Econometric models. Monetary policy -- Econometric models.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/13512677

Hidden Bibliographic Details
Other authors / contributors:	Zicchino, Lea. Habermeier, Karl Friedrich. International Monetary Fund. Monetary and Capital Markets Department.
ISBN:	1462302319 9781462302314 1452767238 9781452767239 9786612841835 6612841834 1451870906 9781451870909 1282841831 9781282841833
Notes:	At head of title: Monetary and Capital Markets Department. "September 2008." Includes bibliographical references. English. Online resource; title from PDF front page (ebrary, viewed February 26, 2014).
Summary:	We assess the extent to which loan losses affect banks' provision of credit to companies and households and examine how feedback from losses to a reduction in credit is affected by the monetary policy stance. Using a unique cross-country dataset of more than 600 banks from 32 countries, we find that losses lead to a reduction in credit and that this effect is more pronounced when either initial bank capitalization is thin or when monetary policy is tight. Moreover, in the face of credit losses, ample capital is more important in cushioning the effect of loan losses when monetary policy is tight. In other words, capital buffers and accommodating monetary policy act as 'substitutes' in offsetting the adverse effect of losses on loan growth. While most of these effects are stronger in crisis times, we find them to operate both in and outside full-blown banking crises. These findings have important implications for the interplay between financial stability and monetary policy, which this paper also draws out.
Other form:	Print version: Nier, Erlend. Bank losses, monetary policy and financial stability. Washington, D.C. : International Monetary Fund, ©2008

Description
Summary:	We assess the extent to which loan losses affect banks' provision of credit to companies and households and examine how feedback from losses to a reduction in credit is affected by the monetary policy stance. Using a unique cross-country dataset of more than 600 banks from 32 countries, we find that losses lead to a reduction in credit and that this effect is more pronounced when either initial bank capitalization is thin or when monetary policy is tight. Moreover, in the face of credit losses, ample capital is more important in cushioning the effect of loan losses when monetary policy is tight. In other words, capital buffers and accommodating monetary policy act as substitutes in offsetting the adverse effect of losses on loan growth. While most of these effects are stronger in crisis times, we find them to operate both in and outside full-blown banking crises. These findings have important implications for the interplay between financial stability and monetary policy, which this paper also draws out.
Item Description:	At head of title: Monetary and Capital Markets Department. "September 2008."
Physical Description:	1 online resource (32 pages) : illustrations
Bibliography:	Includes bibliographical references.
ISBN:	1462302319 9781462302314 1452767238 9781452767239 9786612841835 6612841834 1451870906 9781451870909 1282841831 9781282841833