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Monetary policy and bank risk-taking: Evidence from emerging economies
Journal article   Peer reviewed

Monetary policy and bank risk-taking: Evidence from emerging economies

Minghua Chen, Ji Wu, Bang Nam Jeon and Rui Wang
Emerging markets review, v 31, pp 116-140
Jun 2017

Abstract

Bank risk-taking Emerging economies Monetary policy
This paper addresses the impact of monetary policy on banks' risk-taking by using bank-level panel data from more than 1000 banks in 29 emerging economies during 2000–2012. We find that, consistent with the proposition of the “bank risk-taking channel” of monetary policy transmission, banks' riskiness increases when monetary policy is eased. This result is robust when we adopt alternative measures of monetary policy and bank risk, and use different econometric methodologies. In addition, we find that bank risk-taking amid expansionary monetary policy is less conspicuous in a more consolidated banking sector and when monetary policy is more transparent.

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#10 Reduced Inequalities
#8 Decent Work and Economic Growth
#1 No Poverty
#9 Industry, Innovation and Infrastructure

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
Economics
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