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The Effect Of Monetary Policy On Bank Wholesale Funding, Hyunsoo Choi, Hyun Soo Choi
The Effect Of Monetary Policy On Bank Wholesale Funding, Hyunsoo Choi, Hyun Soo Choi
Research Collection Lee Kong Chian School Of Business
We study how monetary policy affects the funding composition of the banking sector. When monetary tightening reduces the retail deposit supply due to, for example, a decrease in bank reserves or in money demand, banks try to substitute the deposit outflows with more wholesale funding in order to mitigate the policy impact on their lending. Banks have varying degrees of accessibility to wholesale funding sources because of financial frictions, and those banks that are large or that have a greater reliance on wholesale funding increase their wholesale funding more. As a result, monetary tightening increases both the reliance on and …
The Effect Of Monetary Policy On Bank Wholesale Funding, Hyunsoo Choi, Hyun Soo Choi
The Effect Of Monetary Policy On Bank Wholesale Funding, Hyunsoo Choi, Hyun Soo Choi
Research Collection Lee Kong Chian School Of Business
We study how monetary policy affects the funding composition of the banking sector. When monetary tightening reduces the retail deposit supply due to, for example, a decrease in bank reserves or in money demand, banks try to substitute the deposit outflows with more wholesale funding in order to mitigate the policy impact on their lending. Banks have varying degrees of accessibility to wholesale funding sources because of financial frictions, and those banks that are large or that have a greater reliance on wholesale funding increase their wholesale funding more. As a result, monetary tightening increases both the reliance on and …