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Empirical Economics
Erschienen in: Empirical Economics 3/2019

29.05.2018

Involuntary excess reserve and heterogeneous transmission of policy rates to bank lending rates in China

verfasst von: Thai V. H. Nguyen, Agyenim Boateng, Tra Thi Thu Pham

Erschienen in: Empirical Economics | Ausgabe 3/2019

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Abstract

This study examines the impact of liquidity and involuntary excess reserves on interest rate pass-through in China. Employing Error Correction Model estimation based on a sample of 86 banks over the period of 2000–2013, the study finds that liquid banks can better shield against tightening monetary policy and adjust lending rate sluggishly. In contrast, banks with larger involuntary excess reserves tend to increase lending interest rates more rapidly in response to tightening monetary policy. We conclude that unwanted liquidity may lead to risk-taking behaviours which are detrimental to financial stability.
Vorheriger Artikel Restoring euro area monetary transmission: Which role for government bond rates?
Nächster Artikel Asymmetric effects of fiscal balance on monetary variables: evidence from large emerging economies

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Metadaten
Titel
Involuntary excess reserve and heterogeneous transmission of policy rates to bank lending rates in China
verfasst von
Thai V. H. Nguyen
Agyenim Boateng
Tra Thi Thu Pham
Publikationsdatum
29.05.2018
Verlag
Springer Berlin Heidelberg
Erschienen in
Empirical Economics / Ausgabe 3/2019
Print ISSN: 0377-7332
Elektronische ISSN: 1435-8921
DOI
https://doi.org/10.1007/s00181-018-1468-x

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