Publication
Nov 2006
Based on a quarterly regulatory dataset for German banks from 1999 to 2004, this paper analyzes the effects of banks' regulatory capital on the transmission of monetary policy in a system of liquidity networks. The dynamic panel regression results provide evidence in favor of the bank capital channel theory. The authors argue that Banks holding less regulatory capital and less interbank liquidity react more restrictively to a monetary tightening than their peers.
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English (PDF, 47 pages, 877 KB) |
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Author | Christian Merkl, Stéphanie Stolz |
Series | Kiel Institute Working Papers |
Issue | 1303 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2006 Kiel Institute for the World Economy |