Banking Competition, Banking Stability and the Lending Channel of Monetary Policy: the Case of Thailand

Authors

  • Attasuda Lerskullawat Faculty of Economics, Kasetsart University, Bangkok, Thailand

Keywords:

Bank Lending Channel, Banking Competition, Banking Stability, Monetary Policy, Thailand

Abstract

This paper examines the bank lending channel and the effect of banking competition and banking stability on the lending channel of monetary policy in Thailand using bank-level panel data from the period 1999Q1-2016Q4. The results show a significant effect of monetary policy via the bank lending channel in Thailand, which is higher in larger sized banks and lower in banks with low capitalization and liquidity. A higher degree of banking competition and banking stability mainly weaken the effect of monetary policy through the bank lending channel. This effect is higher in financially constrained banks than the less financially constrained ones.

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Published

2018-12-26