The effect of liquidity shocks on the bank lending channel: Evidence from India
© 2017 Elsevier Inc. Using a structural VAR framework and unique bank liquidity index, this study builds a short run model to analyse dynamic interactions among monetary policy, bank liquidity, and bank lending in India. We find that monetary policy shocks have strong initial and persistent impacts...
| Main Authors: | , |
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| Format: | Journal Article |
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Elsevier
2017
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| Online Access: | http://hdl.handle.net/20.500.11937/63173 |
| _version_ | 1848761014216032256 |
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| author | Mishra, A. Burns, Kelly |
| author_facet | Mishra, A. Burns, Kelly |
| author_sort | Mishra, A. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | © 2017 Elsevier Inc. Using a structural VAR framework and unique bank liquidity index, this study builds a short run model to analyse dynamic interactions among monetary policy, bank liquidity, and bank lending in India. We find that monetary policy shocks have strong initial and persistent impacts on bank lending, while liquidity shocks impact bank lending after a 9-month lag. We also find evidence of an indirect feedback channel between monetary policy and bank lending operating through changes in bank liquidity. However, the indirect effect of monetary policy on bank lending (through bank liquidity) operates with a lag of roughly 6–9 months. |
| first_indexed | 2025-11-14T10:24:56Z |
| format | Journal Article |
| id | curtin-20.500.11937-63173 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:24:56Z |
| publishDate | 2017 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-631732018-02-06T06:23:52Z The effect of liquidity shocks on the bank lending channel: Evidence from India Mishra, A. Burns, Kelly © 2017 Elsevier Inc. Using a structural VAR framework and unique bank liquidity index, this study builds a short run model to analyse dynamic interactions among monetary policy, bank liquidity, and bank lending in India. We find that monetary policy shocks have strong initial and persistent impacts on bank lending, while liquidity shocks impact bank lending after a 9-month lag. We also find evidence of an indirect feedback channel between monetary policy and bank lending operating through changes in bank liquidity. However, the indirect effect of monetary policy on bank lending (through bank liquidity) operates with a lag of roughly 6–9 months. 2017 Journal Article http://hdl.handle.net/20.500.11937/63173 10.1016/j.iref.2017.09.011 Elsevier restricted |
| spellingShingle | Mishra, A. Burns, Kelly The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title | The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title_full | The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title_fullStr | The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title_full_unstemmed | The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title_short | The effect of liquidity shocks on the bank lending channel: Evidence from India |
| title_sort | effect of liquidity shocks on the bank lending channel: evidence from india |
| url | http://hdl.handle.net/20.500.11937/63173 |