Firm balance sheets and monetary policy transmission

• 成果类型: Article
• 署名作者: Ashcraft, Adam B.; Campello, Murillo
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; University of Illinois System; University of Illinois Urbana-Champaign; National Bureau of Economic Research
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2007.03.003
• 发表日期: 2007
• 页码: 1515-1528
• 关键词: Monetary policy; balance sheet channel; financial conglomerates; internal capital markets; financial constraints

摘要

The functioning of internal capital markets in financial conglomerates facilitates a novel identification strategy of the balance sheet channel of monetary policy. We look at small subsidiary banks that are affiliated with the same holding company but operate in different geographical areas. These banks face the same marginal cost of funds due to internal capital markets, but face different borrowers as they concentrate their lending with small local businesses. Exploring cross-sectional variation in local economic conditions across these subsidiaries, we investigate whether borrower creditworthiness influences the response of bank lending to monetary policy. Our results are consistent with a demand-driven transmission mechanism that works through firm balance sheets and is independent from the bank lending channel. (c) 2007 Elsevier B.V. All rights reserved.