Foreign bank penetration and the lending channel in emerging economies: Evidence from bank-level panel data

The Bank Lending Channel of Monetary Policy? The Panel Evidence from Egypt

“…In Brazil, Auel and De Mendonça (2011) found a significant relationship between interest rates and loans, using the GMM model. In the emerging economies of Asia, Latin America and Central and Eastern Europe, Wu et al (2011) supported the existence of the bank lending channel, using the GMM model. In Mexico, Mora (2013) found that small banks are more sensitive to monetary policy shocks than large banks.…”

Consolidation in banking and the lending channel of monetary transmission: Evidence from Asia and Latin America

“…6 A cost channel of monetary transmission, as another form of the supply-side effect of monetary policy, has also been identified to be important and time-varying at the macroeconomic level in the U.S. economy (see, for example, Tillmann (2009).). 7 The most noteworthy among these changes are domestic mergers and acquisitions and changes in the structure of ownership along with increased foreign bank penetration and a shift from government to private control (see Wu et al (2011)). 8 Archer (2006) suggests that the broad credit channel plays an increasingly important role in emerging markets as the implementation of monetary policy in those countries has transitioned from direct intervention and regulation to the use of indirect monetary instruments.…”

The role of foreign banks in monetary policy transmission: Evidence from Asia during the crisis of 2008–9

“…Wu et al (2011) find evidence that foreign banks, compared to domestic counterparts, are less sensitive to changes in the host monetary policy in adjusting their loans and interest rate, even after controlling for the heterogeneity in liquidity, capitalization, size and cost efficiency at the individual bank level. Arena et al (2007) also find difference between domestic and foreign banks in the loan growth rate and the lending interest rate in response to changes in monetary policy, but only as significant among lower liquid and capitalized banks.…”