Financial technologies and the effectiveness of monetary policy transmission

Arbeitspapier

This study investigates whether and how financial technologies (FinTech) influence the effectiveness of monetary policy transmission. We use an interacted panel vector autoregression model to explore how the effects of monetary policy shocks change with regional-level FinTech adoption. Results indicate that FinTech adoption generally mitigates the transmission of monetary policy to real GDP, consumer prices, bank loans, and housing prices, with the most significant impact observed in the weakened transmission to bank loan growth. The relaxed financial con straints, regulatory arbitrage, and intensified competition are the possible me chanisms underlying the mitigated transmission.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 26/2020

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Monetary Policy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
• Subject: financial technology ; interacted panel VAR ; monetary policy

Contributors, Places and Time

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

Further information

• Handle: http://hdl.handle.net/10419/280351
• Last update: 10.03.2025, 11:43 AM CET