Bank characteristics, financial market development and monetary policy transmission
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The paper examines the effect of bank level characteristics and financial market development on the bank lending channel of monetary policy transmission in India using Arellano–Bond (1991) dynamic panel data model. A sample of 73 Commercial Banks for the period from 2005-2015 is used for the analysis. The results indicate that size, liquidity and capitalization are important bank characteristics which have a significant impact on monetary policy transmission. The study also finds that with the development of financial markets, the bank lending channel of transmission has become weaker.
- GIPE Working Papers