Keywords: Competition, monetary policy, lending channel
Abstract: We study the relationship between banking competition and the transmission of monetary
policy through the bank lending channel. Using business small loan origination data
provided from the Community Reinvestment Act from 1996-2002 in our analysis, we are
able to reaffirm the existence of the bank lending channel of monetary transmission.
Moreover, we find that the impact of monetary policy on loan originations is weaker in
more concentrated markets.
Full paper (159 KB PDF)
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Last update: April 12, 2005