Bank Lending Channel in Monetary Policy Transmission: Evidence from Russia

Abstract

This paper examines whether a bank lending channel exists in monetary policy transmission in Russia, employing Russian bank-level data from 2005 through 2012. The results of specifications suggest that banks with less capital tend to react more sensitively to changes in monetary policy. Furthermore, this study finds that smaller, more liquid and/or better-capitalized banks were likely to have more rapidly growing loan portfolios, and larger banks tended to attenuate the crisis shock.