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This article analyses how financial development affects the bank lending channel in developing countries. Our analysis is carried out on a sample of 693 commercial banks from 31 developing countries between 2000 and 2012. We find that the loan supply of banks that operate in countries with less

This article analyses how sovereign risk affects the bank lending channel of monetary policy, and tests whether these effects differed before, during, and after the onset of the financial crisis. This issue was analysed only in the eurozone during the sovereign debt crisis. However, these results are difficult to extrapolate to other countries. First, Europe is the only developed region that has experienced sovereign risk concerns. Second, it has a centralised monetary regime controlled by the European Central Bank, so it is more difficult to adapt monetary decisions to the specific level of sovereign risk in each country. To overcome these limitations, our analysis is based on two country scenarios: (1) developed countries (eurozone vs. noneurozone countries); and (2) developing countries. We find that the role of sovereign risk in the transmission of monetary policy is very complex, and its significance not only varied before, during, and after the global financial crisis, but also in developed and developing countries.

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This article analyses how creditor rights affect the trade credit channel of monetary policy. We also aim to test whether these effects were conditioned by the global financial crisis of 2008. Using a sample of 15,356 firms from 29 countries (2001–2017), we found that in normal times or in countries not very severely affected by the financial crisis, trade credit receivables increase during monetary restrictions. Moreover, this increase is less pronounced as creditor protection strengthens. In countries strongly affected by the financial crisis, however, trade credit receivables do not react or even decrease after monetary expansions, regardless of the degree of creditor protection. Furthermore, the results of trade credit payables and net trade credit are not conclusive. JEL CLASSIFICATION: E52; K22; G32

The aim of this article is to analyse how sustainable banking affects the transmission of monetary policy through the bank lending channel. We also quantify how these effects are determined by the financial strength of each bank. These objectives, which have not been studied previously, represent an important contribution because real sustainable concerns in banking did not emerged until recently, mainly with the adoption of the Sustainable Development Goals that should be reached by 2030. Since then, some studies have focused on the effects of sustainability on aspects such as bank profitability, risk or efficiency, but none has considered the effects on the bank lending channel of monetary policy. In fact, central banks have incorporated sustainability criteria into their agenda and are analyzing how to include these criteria in the monetary policy framework, so we contribute even more by shedding some light on these aspects and how they depend on the financial strength of the banking sector. We used quarterly data from 79 listed banks from the OECD between 2016 and 2019 (947 observations) and we found that the bank lending channel is operative either for banks with very low sustainability ratings or a weak financial position. When sustainability ratings increase and financial strength becomes moderate, the bank lending channel is ineffective and monetary shocks do not affect lending. For banks with certain sustainable compromises and a strong financial position, the impact of monetary shocks on lending is the opposite of the one that the bank lending channel proposes, and this impact is more intense as sustainability ratings increase. Finally, our results also show that increases in central bank assets boost lending only for banks with low or moderate sustainability ratings, regardless of their financial strength. Overall, these results suggest that more sustainable banks are less dependent on monetary policy decisions.

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