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Do Bank Characteristics Affect Bank Lending Behaviour?

Author

Listed:
  • Offiong Helen Solomon
  • Andy Mullineux
  • Phillip De Jager

    (University of Westminster)

Abstract

This paper investigates the bank lending behaviour in South Africa to see how banks with different characteristics and different types of loans react during changes in interest rates. We find asymmetric effects in the adjustment of loan supply by banks of different characteristics during periods of monetary easing. Smaller, less liquid, poorly capitalised banks are slower in adjusting loan supply during periods of monetary easing. Our study reveals that we may be missing significant information about the monetary transmission mechanism in South Africa by not using bank loan components in analysis.

Suggested Citation

  • Offiong Helen Solomon & Andy Mullineux & Phillip De Jager, 2022. "Do Bank Characteristics Affect Bank Lending Behaviour?," The African Finance Journal, Africagrowth Institute, vol. 24(1), pages 1-15.
    • Handle: RePEc:afj:journl:v:24:y:2022:i:1:p:1-15
    as

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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-finj_v24_n1_a1
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    More about this item

    Keywords

    Bank characteristics; Bank lending channel; Monetary policy; Panel data; South Africa;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania

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