Exploring the Bank Lending Channel: How Bank Characteristics Shape Monetary Policy Effectiveness
Exploring the Bank Lending Channel: How Bank Characteristics Shape Monetary Policy Effectiveness

Summary/Abstract: This paper examines how individual bank characteristics influence the transmission of monetary policy through the bank lending channel. Using panel data and a Fixed Effects model validated by the Hausman test, the author analyses how bank size, capitalization, profitability and asset quality affect responses to monetary tightening. The study highlights the importance of inter-bank differences in shaping monetary policy effectiveness and offers insights for regulatory frameworks and macroprudential policies aimed at strengthening financial stability.

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