Title: Financial development and the lending channel of monetary policy transmission: evidence from Thailand

Authors: Attasuda Lerskullawat

Addresses: Faculty of Economics, Department of Economics, Kasetsart University, 50 Ngam Wong Wan Rd., Lat Yao, Chatuchak, Bangkok 10900, Thailand

Abstract: This paper examines the bank lending channel of monetary policy transmission and the effect of financial market development on the bank lending channel in Thailand using bank-level panel data from the quarterly period of 1992Q1-2011Q4. The empirical results show a significant effect of monetary policy via the bank lending channel of monetary policy in Thailand. This effect of monetary policy is higher especially in bank with larger size as well as bank with lower capitalisation. Financial market development, including the banking sector development and the capital market development, mainly weakens the effect of monetary policy through the bank lending channel in Thailand.

Keywords: monetary policy; bank lending channel; financial market development; Thailand.

DOI: 10.1504/IJMEF.2018.093788

International Journal of Monetary Economics and Finance, 2018 Vol.11 No.3, pp.224 - 234

Received: 25 Sep 2016
Accepted: 15 Oct 2016
Published online: 06 Aug 2018 *

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