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| Author: | Huang, Z. |
| Title: | Evidence of a bank lending channel in the UK |
| Journal: | Journal of Banking and Finance
2003 : MAR, VOL 27:3, p. 491-510 |
| Index terms: | Banking United Kingdom |
| Freeterms: | Lending |
| Language: | eng |
| Abstract: | Using balance sheet data for a panel of UK listed firms, this study finds evidence of a bank lending channel of monetary transmission. A higher interest rate induces more bank lending to listed companies, but this effect diminishes if monetary policy becomes tight enough to impose severe constraints on bank loan lending. The dynamic behaviour of bank debt versus non-bank debt shows that the lending channel works through cutting back loan supplies to small, bank-dependent firms while restricting the bank's ability to provide financial assistance to other firms. Cross-sectional differences are seen btw. bank-dependent and non-bank-dependent listed companies, and btw. listed and non-listed companies: Both can contribute to the size effect of investment. |
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