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Bank-Lending Channel in South Africa: Bank-Level Dynamic Panel Date Analysis

Author

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  • Moses M. Sichei

    (Department of Economics, University of Pretoria)

Abstract

The paper investigates the bank-lending channel (BLC) of monetary policy in South Africa using quarterly bank-level data for the period 2000Q1-2004Q4. Capital adequacy and bank size are used as indicators for information problems faced by banks when they look for external finance. Utilising dynamic panel estimation methods the study shows that BLC operates in South Africa. The finding has some policy implications. First, there is need to coordinate monetary policy with financial innovations and prudential banking regulations. Second, the overall effects of monetary policy pursued by the South African Reserve Bank cannot be completely characterised by interest rates only.

Suggested Citation

  • Moses M. Sichei, 2005. "Bank-Lending Channel in South Africa: Bank-Level Dynamic Panel Date Analysis," Working Papers 200510, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:200510
    as

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    References listed on IDEAS

    as
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    Cited by:

    1. repec:idn:jimfjn:v:4:y:2018:i:2e:p:1-14 is not listed on IDEAS
    2. Rangan Gupta & Josine Uwilingiye, 2010. "Dynamic Time Inconsistency And The South African Reserve Bank," South African Journal of Economics, Economic Society of South Africa, vol. 78(1), pages 76-88, March.
    3. Yu Hsing & Wen-jen Hsieh, 2014. "Test of the Bank Lending Channel for a BRICS Country," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(8), pages 1016-1023, August.
    4. Zuriyati Ahmad & Abdul Ghafar Ismail, 2018. "Alternative Of Monetary Policy Indicator: Panel Data Analysis From Islamic Banks In Malaysia," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 4(2), pages 279-292, November.
    5. Matousek, Roman & Solomon, Helen, 2018. "Bank lending channel and monetary policy in Nigeria," Research in International Business and Finance, Elsevier, vol. 45(C), pages 467-474.
    6. Asrat Tsegaye & Syden Mishi, 2012. "The Role of Banks in Monetary Policy Transmission in South Africa," Working Papers 295, Economic Research Southern Africa.

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    More about this item

    Keywords

    Monetary policy transmission; Bank-lending channel; Dynamic panel; GMM estimator;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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