Bank lending and monetary policy: the effects of structural shift in interest rates
This paper provides evidence to show that the interest rate regime adopted by the monetary authority plays an important role in determining the effectiveness of the transmission mechanism of monetary policy via bank lending channel using Malaysian data. As part of the strategy to deal with the recen...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Published: |
Economics Bulletin
2007
|
| Subjects: |
| _version_ | 1825720175506227200 |
|---|---|
| author | Goh, K.L. Yong, S.L. |
| author_facet | Goh, K.L. Yong, S.L. |
| author_sort | Goh, K.L. |
| collection | UM |
| description | This paper provides evidence to show that the interest rate regime adopted by the monetary authority plays an important role in determining the effectiveness of the transmission mechanism of monetary policy via bank lending channel using Malaysian data. As part of the strategy to deal with the recent financial crisis, the Malaysian government introduced capital control measures which subsequently led to a structural shift in interest rates. Before the shift, interest rates were relatively high. The contractionary monetary policy achieved desirable results through the bank lending channel. However, responses of bank lending to interest rate changes were limited after the structural shift which characterises a period of low interest rate regime, rendering the bank lending channel ineffective. |
| first_indexed | 2024-03-06T05:31:02Z |
| format | Article |
| id | um.eprints-12389 |
| institution | Universiti Malaya |
| last_indexed | 2024-03-06T05:31:02Z |
| publishDate | 2007 |
| publisher | Economics Bulletin |
| record_format | dspace |
| spelling | um.eprints-123892015-01-26T13:08:12Z http://eprints.um.edu.my/12389/ Bank lending and monetary policy: the effects of structural shift in interest rates Goh, K.L. Yong, S.L. HB Economic Theory This paper provides evidence to show that the interest rate regime adopted by the monetary authority plays an important role in determining the effectiveness of the transmission mechanism of monetary policy via bank lending channel using Malaysian data. As part of the strategy to deal with the recent financial crisis, the Malaysian government introduced capital control measures which subsequently led to a structural shift in interest rates. Before the shift, interest rates were relatively high. The contractionary monetary policy achieved desirable results through the bank lending channel. However, responses of bank lending to interest rate changes were limited after the structural shift which characterises a period of low interest rate regime, rendering the bank lending channel ineffective. Economics Bulletin 2007 Article PeerReviewed Goh, K.L. and Yong, S.L. (2007) Bank lending and monetary policy: the effects of structural shift in interest rates. Economics Bulletin, 5 (5). pp. 1-14. ISSN 1545-2921, http://www.accessecon.com/pubs/EB/2007/Volume5/EB-06E50008A.pdf |
| spellingShingle | HB Economic Theory Goh, K.L. Yong, S.L. Bank lending and monetary policy: the effects of structural shift in interest rates |
| title | Bank lending and monetary policy: the effects of structural shift in interest rates |
| title_full | Bank lending and monetary policy: the effects of structural shift in interest rates |
| title_fullStr | Bank lending and monetary policy: the effects of structural shift in interest rates |
| title_full_unstemmed | Bank lending and monetary policy: the effects of structural shift in interest rates |
| title_short | Bank lending and monetary policy: the effects of structural shift in interest rates |
| title_sort | bank lending and monetary policy the effects of structural shift in interest rates |
| topic | HB Economic Theory |
| work_keys_str_mv | AT gohkl banklendingandmonetarypolicytheeffectsofstructuralshiftininterestrates AT yongsl banklendingandmonetarypolicytheeffectsofstructuralshiftininterestrates |