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Digital transformation, monetary policy and risk-taking of banks

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  • Ding, Qiaoying
  • He, Wensheng

Abstract

This paper studies how the digital transformation affects the monetary policy on the risk-taking mechanism of banks. It is found that moderately loose price-based and quantitative-based monetary policies can expand bank risk-taking, and the digital transformation weakens the monetary policy's regulation mechanism on bank risk, compared with city commercial banks, agricultural commercial bank and other small and medium-sized banks, state-owned, joint-stock and other large banks can more ease the impact of internet finance on the monetary policy control mechanism. The conclusion of this paper can provide reference for making macro-monetary policy and mitigating bank risk.

Suggested Citation

  • Ding, Qiaoying & He, Wensheng, 2023. "Digital transformation, monetary policy and risk-taking of banks," Finance Research Letters, Elsevier, vol. 55(PB).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pb:s1544612323003586
    DOI: 10.1016/j.frl.2023.103986
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    References listed on IDEAS

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    Cited by:

    1. Yao, Haixiang & Zhang, Weixuan & Wu, Zhouheng, 2024. "Monetary policy rule under rare events: With implications by digital finance development," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
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    3. Lin, Baoguo & Dong, Xueqin, 2024. "Empirical Study on the Impact of Digital Finance on Commercial Credit Allocation in SMEs," Finance Research Letters, Elsevier, vol. 61(C).

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