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Bank-characteristics, lending channel and monetary policy in emerging markets: bank-level evidence from Malaysia

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  • Muhamed Zulkhibri

Abstract

This article analyses the effects of bank-specific characteristics, bank specialization and portfolio concentrations on the transmission of monetary policy via the bank-lending channel in Malaysia, a fairly well-developed financial system, using the dynamic panel regression estimation. The results provide evidence in favour of the bank-lending channel theory that the bank-lending channel operating via small- and low-liquidity banking entities. Furthermore, the evidence suggests that the dividing lines between different categories of financial institutions distinguished by differences in both market and regulatory structures, influence the way the financial institutions react to a monetary policy shock, of which finance companies react stronger than commercial banks. The results also suggest that banks with a higher level of corporate loan concentration experience greater financial constraint and limited access to other source finance.

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  • Muhamed Zulkhibri, 2013. "Bank-characteristics, lending channel and monetary policy in emerging markets: bank-level evidence from Malaysia," Applied Financial Economics, Taylor & Francis Journals, vol. 23(5), pages 347-362, March.
    • Handle: RePEc:taf:apfiec:v:23:y:2013:i:5:p:347-362
    DOI: 10.1080/09603107.2012.725927
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    Cited by:

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    2. Adesina, Kolade Sunday, 2019. "Basel III liquidity rules: The implications for bank lending growth in Africa," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    3. Yang, Jun & Shao, Hanhua, 2016. "Impact of bank competition on the bank lending channel of monetary transmission: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 468-481.
    4. Adeola Y. Oyebowale, 2020. "Determinants of Bank Lending in Nigeria," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 12(3), pages 378-398, September.
    5. Zulkhibri, Muhamed & Sakti, Muhammad Rizky Prima, 2017. "Macroprudential Policy and Financing Behaviour in Dual Banking System: Bank-Level Evidence from Indonesia," Working Papers 2017-5, The Islamic Research and Teaching Institute (IRTI).
    6. Mahbuba Aktar & Mohammad Zoynul Abedin & Anupam Das Gupta, 2021. "The Impact of Monetary Policy Shocks on Corporate Dynamic Investment Activity With Financial Heterogeneity," SAGE Open, , vol. 11(1), pages 21582440209, February.
    7. Jean Christine A. Armas, 2021. "Is the Bank Lending Channel of Monetary Policy Evident in the Philippines? A Dynamic Panel Data Approach," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 246-269, September.

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