The bank lending channel of monetary policy? The panel evidence from Egypt

Mohamed Aseel Shokr, Zulkefly Abdul Karim, Mansor Jusoh, Mohd Azlan Shah Zaidi

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This paper examines the relevance of the bank lending channel of monetary policy in Egypt using bank-level data. Previous empirical studies in Egypt that used macro-level data have not supported the relevance of the bank lending channel. However, using a sample of 32 commercial banks for the period from 1998 until 2011 and a dynamic panel GMM technique, the empirical findings revealed the relevance of the bank lending channel of monetary policy in Egypt. Moreover, there is a heterogeneity effect of monetary policy on bank loans according to bank size, in which the small banks are more affected during a monetary contraction than larger banks. This finding signals that the monetary authorities in Egypt should take cognizance of the stability of interest rates in order to stabilize the bank loan supply.

Original languageEnglish
Pages (from-to)255-274
Number of pages20
JournalGadjah Mada International Journal of Business
Volume16
Issue number3
Publication statusPublished - 1 Jan 2014

Fingerprint

Egypt
Monetary policy
Bank lending channel
Bank loans
Authority
Empirical study
Dynamic panel
Bank size
Commercial banks
Contraction
Interest rates

Keywords

  • Bank lending channel
  • Generalized method of moments (GMM)
  • Monetary policy

ASJC Scopus subject areas

  • Economics and Econometrics
  • Business and International Management

Cite this

The bank lending channel of monetary policy? The panel evidence from Egypt. / Shokr, Mohamed Aseel; Abdul Karim, Zulkefly; Jusoh, Mansor; Zaidi, Mohd Azlan Shah.

In: Gadjah Mada International Journal of Business, Vol. 16, No. 3, 01.01.2014, p. 255-274.

Research output: Contribution to journalArticle

@article{ba8cb177faf6460ca4ba0455e196973a,
title = "The bank lending channel of monetary policy? The panel evidence from Egypt",
abstract = "This paper examines the relevance of the bank lending channel of monetary policy in Egypt using bank-level data. Previous empirical studies in Egypt that used macro-level data have not supported the relevance of the bank lending channel. However, using a sample of 32 commercial banks for the period from 1998 until 2011 and a dynamic panel GMM technique, the empirical findings revealed the relevance of the bank lending channel of monetary policy in Egypt. Moreover, there is a heterogeneity effect of monetary policy on bank loans according to bank size, in which the small banks are more affected during a monetary contraction than larger banks. This finding signals that the monetary authorities in Egypt should take cognizance of the stability of interest rates in order to stabilize the bank loan supply.",
keywords = "Bank lending channel, Generalized method of moments (GMM), Monetary policy",
author = "Shokr, {Mohamed Aseel} and {Abdul Karim}, Zulkefly and Mansor Jusoh and Zaidi, {Mohd Azlan Shah}",
year = "2014",
month = "1",
day = "1",
language = "English",
volume = "16",
pages = "255--274",
journal = "Gadjah Mada International Journal of Business",
issn = "1411-1128",
publisher = "Universitas Gadjah Mada",
number = "3",

}

TY - JOUR

T1 - The bank lending channel of monetary policy? The panel evidence from Egypt

AU - Shokr, Mohamed Aseel

AU - Abdul Karim, Zulkefly

AU - Jusoh, Mansor

AU - Zaidi, Mohd Azlan Shah

PY - 2014/1/1

Y1 - 2014/1/1

N2 - This paper examines the relevance of the bank lending channel of monetary policy in Egypt using bank-level data. Previous empirical studies in Egypt that used macro-level data have not supported the relevance of the bank lending channel. However, using a sample of 32 commercial banks for the period from 1998 until 2011 and a dynamic panel GMM technique, the empirical findings revealed the relevance of the bank lending channel of monetary policy in Egypt. Moreover, there is a heterogeneity effect of monetary policy on bank loans according to bank size, in which the small banks are more affected during a monetary contraction than larger banks. This finding signals that the monetary authorities in Egypt should take cognizance of the stability of interest rates in order to stabilize the bank loan supply.

AB - This paper examines the relevance of the bank lending channel of monetary policy in Egypt using bank-level data. Previous empirical studies in Egypt that used macro-level data have not supported the relevance of the bank lending channel. However, using a sample of 32 commercial banks for the period from 1998 until 2011 and a dynamic panel GMM technique, the empirical findings revealed the relevance of the bank lending channel of monetary policy in Egypt. Moreover, there is a heterogeneity effect of monetary policy on bank loans according to bank size, in which the small banks are more affected during a monetary contraction than larger banks. This finding signals that the monetary authorities in Egypt should take cognizance of the stability of interest rates in order to stabilize the bank loan supply.

KW - Bank lending channel

KW - Generalized method of moments (GMM)

KW - Monetary policy

UR - http://www.scopus.com/inward/record.url?scp=84967240059&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84967240059&partnerID=8YFLogxK

M3 - Article

VL - 16

SP - 255

EP - 274

JO - Gadjah Mada International Journal of Business

JF - Gadjah Mada International Journal of Business

SN - 1411-1128

IS - 3

ER -