Brzoza-Brzezina, Michal and Chmielewski, Tomasz and Niedźwiedzińska, Joanna (2007): Substitution between domestic and foreign currency loans in Central Europe. Do central banks matter?
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In this paper we ask a question about the impact of monetary policy on total bank lending in the presence of a developed market for foreign currency denominated loans and potential substitutability between domestic and foreign currency loans. Our results, based on a panel of three biggest Central European countries (the Czech Republic, Hungary and Poland) confirm the existence of the substitution effect between these loans. Restrictive monetary policy leads to a decrease in domestic currency lending but simultaneously accelerates foreign currency denominated loans. This makes the central bank's job harder with respect to providing both, monetary and financial stability.
|Item Type:||MPRA Paper|
|Original Title:||Substitution between domestic and foreign currency loans in Central Europe. Do central banks matter?|
|Keywords:||domestic and foreign currency loans, substitution, monetary policy, financial stability, Central Europe|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy
|Depositing User:||Tomasz Chmielewski|
|Date Deposited:||25. Jan 2008 19:28|
|Last Modified:||09. Jan 2014 08:27|
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Substitution between domestic and foreign currency loans in Central Europe. Do central banks matter? (deposited 15. Jan 2008 23:54)
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