for banks. Bank lending behavior responds significantly to reserve requirements and liquidity positions. Our analysis … allows us to identify a new channel that we name as the "liquidity channel". The channel works through a decline in bank … liquidity and loan supply due to an increase in reserve requirements. …

Off-balance-sheet (OBS) activities are special means of credit expansion of commercial banks, which can affect banks …, and this dampening effect is stronger in periods of market liquidity shortage. …