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:: year 7, Issue 19 (Spring 2014) ::
JMBR 2014, 7(19): 27-50 Back to browse issues page
Simultaneous Effects of Bank Concentration and Monetary Policy on Bank Lending Channel in Iranian Banking System
Mahshid Shahchera , Lian Keshishian
Abstract:   (2298 Views)

The main goal of this paper is to study the impact of concentration and the interaction term of monetary policy with concentration index on bank lending in Iranian banking system. This paper determined the effect of the reserve requirement rate as monetary policy indicator and the effect of the interaction term of monetary policy with concentration index. This research estimates the model by Dynamic Panel Data method and Generalized Moment Method (GMM). In order to, both macroeconomic and bank-level balance sheet data for eighteen banks of Iranian banking industry from 2001 to 2012 are used. The estimation results show that the coefficients of concentration variable which is estimated for three different indexes including Herfindahl - Hirshman Index, concentration ratio (CR4) and the Entropy index, are statistically significant and negative, suggesting that increased concentration reduces lending of the banks and weakens the lending channel as a monetary transmission mechanism. The interaction term of monetary policy with concentration index which is estimated by three different concentration indexes, has significant and negative impact on bank lending channel, suggesting that any increase in this variable reduces lending of the banks.

Full-Text [PDF 808 kb]   (1739 Downloads)    
Type of Study: Empirical Study |
Received: 2015/04/7 | Accepted: 2015/04/7 | Published: 2015/04/7
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year 7, Issue 19 (Spring 2014) Back to browse issues page
فصلنامه پژوهش‌های پولی-بانکی Journal of Monetary & Banking Research
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