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trillion. The effect of reserve balances in simple macroeconomic models often comes through the money multiplier, affecting the … money. Nevertheless, some academic research and many textbooks continue to use the money multiplier concept in discussions … the standard multiplier model or the bank lending channel. In particular, if the level of reserve balances is expected to …
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The role of bank capital as a propagation channel of shocks is strongly pronounced in recent macroeconomic models. In this paper, we show how the evolution of bank capital depends on the share of non-state-contingent assets in banks’ balance sheets and present the consequences for...
Persistent link: https://www.econbiz.de/10010415785
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We investigate the transmission of changes in bank capital requirements and supranational monetary policy, and their interaction effect, on euro area bank lending and lending rates. Our results show that - for weakly capitalized banks - increases in capital requirements are in the short-run...
Persistent link: https://www.econbiz.de/10012160525
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This paper analyzes the effect of bank capital adequacy regulation on the monetary transmission mechanism. Using a general equilibrium framework and a representative bank, the model demonstrates that the monetary transmission mechanism is weakened if banks are poorly capitalized, or if the...
Persistent link: https://www.econbiz.de/10011538929
We investigate the transmission of changes in bank capital requirements and supranational monetary policy, and their interaction effect, on euro area bank lending and lending rates. Our results show that - for weakly capitalized banks - increases in capital requirements are in the short-run...
Persistent link: https://www.econbiz.de/10012840476
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