Financial development and the lending channel of monetary policy transmission: evidence from Thailand

Lerskullawat, Attasuda

doi:10.1504/ijmef.2018.093788

Cited by 5 publications

(5 citation statements)

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“…-Competitiveness (Com) is measured by calculating the ratio of the big five banks' total assets to total bank system total assets ( Le & Ngo, 2020;Lerskullawat, 2018;Laowattanabhongse & Sukcharoensin, 2018). This metric measures a bank's competitiveness through its market structure.…”

Section: Methodsmentioning

confidence: 99%

Determinants of bank profitability in Thailand by Generalized method of moments estimation

Paukmongkol

2023

Asia Social Issues

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This research aimed to estimate the determinants of bank profitability of banks registered in Thailand by using the System GMM Estimator method. Bank level data from 2010-2020. Profitability is measured by three ratios: Return on Assets. Return on Equity and Net Interest Income Margin The determinants of a bank's profitability are bank-specific. Banking Industry Specific Factors and Economic Factors. The results showed increasing asset size results in lower profitability for banks, asset quality and operating costs negatively affect profitability. On the other hand, capital adequacy, inflation, and gross domestic product help boost profits for banks.

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Section: Methodsmentioning

confidence: 99%

Determinants of bank profitability in Thailand by Generalized method of moments estimation

Paukmongkol

2023

Asia Social Issues

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“…Literature on Asia. Lerskullawat (2018) revealed that monetary policy significantly influenced the lending rates transmission in Thailand from 1992-Q1 to 2011-Q4. However, findings also demonstrated that financial market development reduced the impact of monetary policy in Thailand via bank lending channel.…”

Section: Empirical Literaturementioning

confidence: 99%

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Azam

Khan

Saleem

2023

JFEP

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Purpose This study aims to explore the impact of monetary policy on bank lending rate with the moderating effects of financial sector development for eight Asian developing economics. Design/methodology/approach This study uses panel autoregressive distributed lag/pooled mean group estimation over the period ranging from 1980 to 2020. Findings The empirical results exhibit an inverse link between monetary policy measured by broad money supply on the bank lending rate, indicating that the increase in the money supply by the central bank lowers the demand for loans and thereby lowers the cost of loan. Moreover, financial sector development decreases the lending rate and thus lowers cost of loan. It is also noted that the interactive term of monetary policy by lending broad money supply and financial sector development showed a positive impact on the lending rate in selected Asian developing countries during the period under the study. Practical implications The outcomes have many relevant policy implications that stronger financial development sector contributes to the efficiency of monetary policy. Regulators and policymakers are therefore recommended to pursue greater financial sector development to lower the cost for fund searchers and to lower the cost of loans, money supply increase is suggested. Originality/value This study contributes to the extant literature on the factors affecting lending rate with the prime aims of monetary policy effectiveness. This study also included financial sector development with some other variables and an interactive term of monetary policy with financial development to have new insight impact of both on the lending rate in developing Asian economies.

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“…The study concluded that the large and well capitalized banks were less prone to taking risks. Lerskullawat (2014) examined the relationship between financial development and monetary transmission mechanism in Thailand. The study revealed that interest rate affected bank loans negatively in the bank lending channel.…”

Section: Developing Country Review On Financial Development and Monetmentioning

confidence: 99%

“…This outcome is in consonance with previous results such as Singh et al (2007); Visco (2007) and Aysun et al (2012) for developed countries and Claus. and Smith (1999); Aysun et al (2012); Lerskullawat (2014) for developing countries. Finally, the cointegrating equation and the structural break date significantly influenced this channel as earlier indicated under the size measure.…”

Section: Banking Sector Development and Monetary Transmission Mechanismmentioning

confidence: 99%

Financial Development and Monetary Transmission Mechanism in Nigeria (1986-2017)

Oyadeyi

Akinbobola

2020

Asian Journal of Economics and Empirical Research

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This study explored the impacts of the different aspects of financial development on monetary transmission mechanism in Nigeria from the period of 1986-2017 using quarterly data. Variables such as broad money supply, debt stock, stock market capitalization, stock market value traded, total deposit money bank's asset, total financial assets, private sector credit, inflation rate, monetary policy rate, exchange rate, all share index and output, were used to carry out this investigation. The study adopted Pesaran, Shin, and Smith (2001) ARDL framework to check the impacts of these individual financial development indicators and how they affect monetary transmission mechanism. The findings suggested that financial development indicators and their interactions with the policy rate influenced each channel of monetary policy with different degrees. Banking sector indicators (size and activity measures) had more influence on the channels of monetary policy transmission compared to capital market indicators, while financial market liberalization had the least influence on the channels of monetary policy transmission. However, the significance of the individual financial development indicators was found to be very weak on exchange rate channel, while the influence of the financial market indicators was strongest on the interest rate channel, thereby supporting previous studies that interest rate channel is the most dominant channel of monetary policy for Nigeria. Finally, the paper recommended that financial reforms must be geared towards strengthening the implementation of monetary policy and the channels through which monetary policies impact real economic activity.

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Financial development and the lending channel of monetary policy transmission: evidence from Thailand

Cited by 5 publications

References 0 publications

Determinants of bank profitability in Thailand by Generalized method of moments estimation

Determinants of bank profitability in Thailand by Generalized method of moments estimation

Monetary policy effectiveness in Asian developing economies: the moderating role of financial sector development

Financial Development and Monetary Transmission Mechanism in Nigeria (1986-2017)

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