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

35 Pages Posted: 6 May 2005  

Robert M. Adams

Federal Reserve Board

Dean F. Amel

Federal Reserve Board - Financial Structure Section

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). FEDS Working Paper No. 2005-16. Available at SSRN: https://ssrn.com/abstract=716349 or http://dx.doi.org/10.2139/ssrn.716349

Robert M. Adams

Federal Reserve Board ( email )

20th and C Streets, NW
Washington, DC 20551
202-452-2653 (Phone)

Dean F. Amel (Contact Author)

Federal Reserve Board - Financial Structure Section ( email )

20th and C Streets, NW
Washington, DC 20551

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