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Is There A Bank Lending Channel Of Monetary Policy In Selected Mena Countries? A Comparative Analysis

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  • ADEL BOUGHRARA

    (Ecole Doctorale and Faculté de Droit et des Sciences, Économiques et Politiques de Sousse, University of Sousse, Cité Erriadh, 4023 Sousse, Tunisia)

  • SAMIR GHAZOUANI

    (Laboratoire d'Économie et Finance Appliquées (LEFA) and Ecole Supérieure de la Statistique et de l'Analyse de l'Information (ESSAI), University of 7 November at Carthage, 6 Rue des métiers, 2035 Charguia II, Tunisia)

Abstract

This paper investigates whether or not there are differential effects of monetary policy across bank characteristics in some selected MENA countries namely Egypt, Jordan, Morocco, and Tunisia, to test for the presence of the bank lending channel (BLC). It uses a panel of micro bank balance sheet data from 1989 to 2007 to estimate the response of bank lending to changes in the monetary policy stance. The assumptions that the effect of a change in the monetary policy stance on a bank's lending activity depends on its capital, size, and on its liquidity base are tested. It has been found that the BLC is operative in almost all the countries. More specifically, the effects of bank characteristics in shaping the banks reaction to changes in the monetary policy are not uniform through the four countries.

Suggested Citation

  • Adel Boughrara & Samir Ghazouani, 2010. "Is There A Bank Lending Channel Of Monetary Policy In Selected Mena Countries? A Comparative Analysis," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 251-282.
    • Handle: RePEc:wsi:medjxx:v:02:y:2010:i:02:n:s1793812010000253
    DOI: 10.1142/S1793812010000253
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    2. Birendra Bahadur Budha, 2013. "The Bank Lending Channel of Monetary Policy in Nepal: Evidence from Bank Level Data," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 25(2), pages 43-65, October.
    3. Garcia-Kilroy, Catiana & Silva, Anderson Caputo, 2011. "Reforming government debt markets in MENA," Policy Research Working Paper Series 5611, The World Bank.
    4. Birendra Bahadur Budha, 2013. "The Bank Lending Channel of Monetary Policy in Nepal: Evidence from Bank Level Data," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 25(2), pages 43-65, October.
    5. Haddou, Samira, 2022. "International financial stress spillovers to bank lending: Do internal characteristics matter?," International Review of Financial Analysis, Elsevier, vol. 83(C).
    6. Richard Adjei Dwumfour & Eric Fosu Oteng-Abayie & Emmanuel Kwasi Mensah, 2022. "Bank efficiency and the bank lending channel: new evidence," Empirical Economics, Springer, vol. 63(3), pages 1489-1542, September.
    7. Birendra Bahadur Budha, 2013. "The Bank Lending Channel of Monetary Policy of Nepal: Evidence from Bank Level," NRB Working Paper 17/2013, Nepal Rastra Bank, Research Department.
    8. Chileshe, Patrick Mumbi, 2017. "Banking structure and the bank lending channel of monetary policy transmission: evidence from panel data methods," MPRA Paper 82757, University Library of Munich, Germany.

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