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This paper examines the bank lending channel of monetary transmission in Malaysia, a country with a dual banking system … (TVAR) model is estimated to take into account possible nonlinearities in the relationship between bank lending and monetary …
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We present a theory in which the key driver of short-term debt issued by the financial sector is the portfolio demand for safe and liquid assets by the nonfinancial sector. This demand drives a premium on safe and liquid assets that the financial sector exploits by owning risky and illiquid...
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