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DOCTORAL SCHOOL OF FINANCE AND BANKING. The bank lending channel in Romania -Solving the Supply versus Demand Puzzle-. Student: Stoica Mihai Supervisor: Professor Moisă Altăr. Theoretical background.
Student: Stoica Mihai
Supervisor: Professor Moisă Altăr
According to the bank lending channel transmission mechanism, banks respond to a monetary contraction by reducing the supply of bank loans.
Bernanke and Blinder (1992)- they observe the reaction of the aggregate bank lending to a change in monetary policy stance
Kashyap and Stein (1994), Favero, Giavazzi, Flabbi (1999), de Bondt (2000), Kakes and Sturm (2000) - improve the identification of the lending channel by using desegregated bank balance sheet data.
Hallsten(1999) and Italiano(2001) use interest rate spreads (e.g. the spread between banking sector lending rate and the overnight interest rate).
The Romanian loan market is supply driven, being characterised by a state of disequilibrium throughout the sample period.
Considering the simplifying assumption we will get the following likelihood function:
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*** National Bank of Romania : Annual Reports, Monthly Bulletins
*** IMF Country Reports 03/123 May 2003, 03/12 Jan. 2003, 03/11 Jan. 2003, 02/254 Nov. 2002