Template-Type: ReDIF-Paper 1.0

Author-Name: Nadezhda Ivanova
Author-Email: IvanovaNS@cbr.ru 
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Svetlana Popova 
Author-Email: PopovaSV@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Konstantin Styrin
Author-Email: StyrinKA@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Title: Bank Market Power and Monetary Policy Transmission: Evidence from Loan-Level Data

Abstract: This paper asks the following questions. How does market structure reshape the
transmission of monetary policy to bank lending? How are loan characteristics such
as loan volume, maturity, lending rate, risk, and the extensive margin of lending affected?
Is there a trade-off between financial stability and the strength of monetary
transmission? We find that, on more concentrated markets, the effect of monetary
policy on lending rate and risk taking is amplified whereas the effect on loan volume
is muted. Our current findings may imply the existence of a trade-off between the
strength of monetary policy transmission and financial stability, but are subject to
further investigation.

Length: 40 pages
Creation-Date: 2024-01
Revision-Date:
Publication-Status:
File-URL: http://cbr.ru/StaticHtml/File/158136/WP_123.pdf 
File-Format: Application/pdf
File-Function:
Number: wps123
Classification-JEL: E44, E52, G21, C14
Keywords:  Monetary policy transmission; Market concentration.
Handle:RePEc:bkr:wpaper:wps123