Loan commitments and monetary policy*

George Sofianos; Paul Wachtel; Arie Melnik

doi:10.1016/0378-4266(90)90070-I

Loan commitments and monetary policy*

George Sofianos
, Paul Wachtel
, Arie Melnik

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

In this paper, we examine the impact of loan commitment agreements on the way in which monetary policy affects the economy. We estimate a vector autoregressive (VAR) model and find evidence of a smaller impact of monetary policy on loans made under commitment agreements than on loans not made under commitment. Our conclusion is that loan commitments effectively protect borrowers from quantity credit rationing and, thus, force monetary policy to work mainly through interest-rate channels.

Original language	English
Pages (from-to)	677-689
Number of pages	13
Journal	Journal of Banking and Finance
Volume	14
Issue number	4
DOIs	https://doi.org/10.1016/0378-4266(90)90070-I
State	Published - Oct 1990

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This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 17 Partnerships for the Goals

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0378-4266(90)90070-I

Cite this

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title = "Loan commitments and monetary policy*",

abstract = "In this paper, we examine the impact of loan commitment agreements on the way in which monetary policy affects the economy. We estimate a vector autoregressive (VAR) model and find evidence of a smaller impact of monetary policy on loans made under commitment agreements than on loans not made under commitment. Our conclusion is that loan commitments effectively protect borrowers from quantity credit rationing and, thus, force monetary policy to work mainly through interest-rate channels.",

author = "George Sofianos and Paul Wachtel and Arie Melnik",

year = "1990",

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doi = "10.1016/0378-4266(90)90070-I",

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AU - Sofianos, George

AU - Wachtel, Paul

AU - Melnik, Arie

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AB - In this paper, we examine the impact of loan commitment agreements on the way in which monetary policy affects the economy. We estimate a vector autoregressive (VAR) model and find evidence of a smaller impact of monetary policy on loans made under commitment agreements than on loans not made under commitment. Our conclusion is that loan commitments effectively protect borrowers from quantity credit rationing and, thus, force monetary policy to work mainly through interest-rate channels.

UR - https://www.scopus.com/pages/publications/38249016404

U2 - 10.1016/0378-4266(90)90070-I

DO - 10.1016/0378-4266(90)90070-I

M3 - Article

AN - SCOPUS:38249016404

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VL - 14

SP - 677

EP - 689

JO - Journal of Banking and Finance

JF - Journal of Banking and Finance

IS - 4

ER -

Loan commitments and monetary policy*

Abstract

UN SDGs

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