Banks' regulatory buffers, liquidity networks and monetary policy transmission

Arbeitspapier

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. Banks holding less regulatory capital and less interbank liquidity react more restrictively to a monetary tightening than their peers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 1303

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: Bank lending channel ; Bank capital channel ; Liquidity networks ; Monetary policy transmission ; Transmissionsmechanismus ; Bank ; Eigenkapital ; Bankenliquidität ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Merkl, Christian ; Stolz, Stéphanie
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/3916
• Last update: 10.03.2025, 11:44 AM CET