Technological innovation and the bank lending channel of monetary policy transmission

Arbeitspapier

This paper studies whether and how banks' technological innovations affect the bank lending channel of monetary policy transmission. We first provide a theoretical model in which banks' technological innovation relaxes firms' earning-based bor rowing constraints and thereby enlarges the response of banks' lending to mone tary policy changes. To test the empirical implications, we construct a patent-based measurement of bank-level technological innovation, which can specify the nature of technology and tell whether it is related to the bank's lending business. We find that lending-related innovations significantly strengthen the transmission of the bank lending channel.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 14/2021

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
• Subject: bank lending channel ; FinTech ; innovation ; monetary policy transmission

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hasan, Iftekhar ; Li, Xiang ; Takalo, Tuomas
• Event: Veröffentlichung
• (who): Halle Institute for Economic Research (IWH)
• (where): Halle (Saale)
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/279879
• Last update: 10.03.2025, 11:41 AM CET