The Effects of Local Banking Market Structure on the Bank-Lending Channel of Monetary Policy

35 Pages Posted: 6 May 2005

See all articles by Robert M. Adams

Robert M. Adams

Board of Governors of the Federal Reserve System

Dean F. Amel

Board of Governors of the Federal Reserve System

Date Written: April 2005

Abstract

We study the relationship between banking competition and the transmission of monetary policy through the bank lending channel. Using business small loan origination data provided from the Community Reinvestment Act from 1996-2002 in our analysis, we are able to reaffirm the existence of the bank lending channel of monetary transmission. Moreover, we find that the impact of monetary policy on loan originations is weaker in more concentrated markets.

Keywords: Competition, monetary policy, lending channel

JEL Classification: E44, E52, G32, L1

Suggested Citation

Adams, Robert M. and Amel, Dean F., The Effects of Local Banking Market Structure on the Bank-Lending Channel of Monetary Policy (April 2005). Available at SSRN: https://ssrn.com/abstract=716349 or http://dx.doi.org/10.2139/ssrn.716349

Robert M. Adams

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States
202-452-2653 (Phone)

Dean F. Amel (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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