Does bank capital affect the monetary policy transmission mechanism? A case study of Emerging Market Economies (EMEs)-Reference-Cited by-同舟云学术

Does bank capital affect the monetary policy transmission mechanism? A case study of Emerging Market Economies (EMEs)

Published:2019-06 Issue:02 Volume:06 Page:1950019
ISSN:2424-7863
Container-title:International Journal of Financial Engineering
language:en
Short-container-title:J. Finan. Eng.

Author:

Abbas Zia¹,Iftikhar Syed Faizan¹,Alam Shaista¹

Affiliation:

1. Applied Economics Research Centre (AERC), University of Karachi, P. O. Box 8403, Karachi 75270, Sindh, Pakistan

Abstract

The objective of this study is to investigate the impact of bank capital on monetary policy transmission mechanism during the period from 2010 to 2016 for 20 Emerging Market Economics (EMEs) by using the two-step system generalized method of moments (GMM). The coefficient of excess capital in low-asset countries is found to be negative which reveals the importance of excess capital for the effectiveness of monetary transmission. However, the study could not find the significance of excess capital for high-asset countries as they may afford the risky way to generate their income by increasing the loan supply.

Publisher

World Scientific Pub Co Pte Lt

Link

https://www.worldscientific.com/doi/pdf/10.1142/S2424786319500191

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1. Procyclical Leverage and Value-at-Risk

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