I. J. of Business & Management Research
Research Article | 
Liquidity Shocks and The Bank Lending Channel: Evidence from Lower-Middle Income Economies
Author(s) : Ibtissem ISSAOUI1, Mahmoud-Sami NABI2
Publisher: FOREX Publication
Published: 30 June 2022
e-ISSN: 2347-4696
Page(s): 40-52
Abstract
This paper examines the impacts of central banks’ liquidity injections on commercial banks’ credit supply in thirty-two lower-middle income economies over the period 1990 until 2020. We use a SVAR panel model to analyze the dynamic interactions between the central bank balance sheet policy, bank liquidity, and bank lending. The results show that liquidity injections have a non-significant impact on the credit to the private sector and a persistent positive impact on banks’ liquid reserves. These results confirm the inefficiency of the bank lending channel in transmitting the central bank balance sheet monetary policy to the real economy in the considered LMIC’s.
General Terms: E44, E52, E59, G21
Keywords: Bank-lending channel, monetary policy, unconventional measures
Ibtissem ISSAOUI, University of Carthage, LEGI-Tunisia Polytechnic School & FSEG Nabeul, Tunisia; Email: ibtissemissaoui1683@gmail.com
Mahmoud-Sami NABI, Economic Research Forum, Egypt
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Ibtissem ISSOUI and Mahmoud Sami NABI (2022), Liquidity Shocks and The Bank Lending Channel: Evidence from Lower-Middle Income Economies. IJBMR 10(2), 40-52. DOI: 10.37391/IJBMR.100202.