Bank Lending Channel Effectiveness and Loan Sales in the US

Jonas, Michael R. and King, Sharmila K. (2013) Bank Lending Channel Effectiveness and Loan Sales in the US. British Journal of Economics, Management & Trade, 4 (1). pp. 16-34. ISSN 2278098X

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Abstract

This paper examines whether banks that sell loans in the secondary market respond differently to a monetary policy innovation from those that do not engage in loan sales. We answer this question by measuring the policy response while controlling for loan sales activities. Using a simple theoretical model and U.S. bank-level Call Report longitudinal data for the period 1991Q1-2008 Q4, we conduct a dynamic panel regression analysis. We find that the long-run response to a typical policy shock is three times greater for mid-size banks engaging in loan sales. Given the increase in proportion of banks engaging in loan sales, this finding has strong implications for policy makers and bank industry volatility.

Item Type: Article
Subjects: Science Global Plos > Social Sciences and Humanities
Depositing User: Unnamed user with email support@science.globalplos.com
Date Deposited: 13 Jul 2023 04:47
Last Modified: 09 Jan 2024 05:12
URI: http://ebooks.manu2sent.com/id/eprint/1159

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