The Role of Banks in Monetary Policy Transmission: Empirical Evidence from Russia

27 Pages Posted: 8 Jul 2009

See all articles by Tuuli Juurikkala

Tuuli Juurikkala

Bank of Finland

Alexei Karas

Utrecht University, University College Roosevelt; Utrecht University School of Economics; Centre for Russian International Socio-Political and Economic Studies (CERISE)

Laura Solanko

Bank of Finland - Institute for Economies in Transition (BOFIT)

Multiple version iconThere are 2 versions of this paper

Date Written: June 30, 2009

Abstract

This paper focuses on the role of the banking sector in monetary policy transmission in an emerging economy with a rapidly developing financial system. Specifically, we exam whether the central bank's monetary policy stance affects banks' lending behaviour. Based on a comprehensive quarterly dataset on all Russian banks from 1Q1999 to 1Q2007, we find evidence for the existence of a bank lending channel in Russia. Contrary to several studies on developed economies, the level of a bank's capitalization matters for the transmission process. Better capitalized banks are less likely to adjust their lending practices following a change in the monetary policy stance.

Keywords: monetary policy transmission, bank lending, Russia

JEL Classification: C23, E44, E52, G21

Suggested Citation

Juurikkala, Tuuli and Karas, Alexei and Solanko, Laura, The Role of Banks in Monetary Policy Transmission: Empirical Evidence from Russia (June 30, 2009). BOFIT Discussion Paper No. 8/2009, Available at SSRN: https://ssrn.com/abstract=1430366 or http://dx.doi.org/10.2139/ssrn.1430366

Tuuli Juurikkala

Bank of Finland ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland

Alexei Karas

Utrecht University, University College Roosevelt ( email )

P.O. Box 94
NL-4331 CB Middelburg
Middelburg, NL-4330 AB
Netherlands
+31 118-655517 (Phone)
+31 118-655508 (Fax)

Utrecht University School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )

Hoveniersberg 24
Ghent, 9000
Belgium
+32 92643480 (Phone)
+32 92643599 (Fax)

Laura Solanko (Contact Author)

Bank of Finland - Institute for Economies in Transition (BOFIT) ( email )

Helsinki 00101
Finland

HOME PAGE: http://www.bof.fi/en/suomen_pankki/organisaatio/asiantuntijoita/solanko_laura/

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