Template-Type: ReDIF-Paper 1.0
Author-Name:   José Bustamante
Author-X-Name-First:  José
Author-X-Name-Last:   Bustamante
Author-Name:   Walter Cuba 
Author-X-Name-First:  Walter
Author-X-Name-Last:    Cuba 
Author-Name:   Rafael Nivin
Author-X-Name-First:  Rafael
Author-X-Name-Last:     Nivin
Title: Determinants of credit growth and the bank-lending channel in Peru: A loan level analysis
Abstract: This paper uses loan-level data from Peru's credit registry to determine how the role of bank-specific characteristics (i.e. bank size, liquidity, capitalization, funding, revenue, and profitability) may affect the supply of credit in domestic and foreign currency. Also, we analyze how these characteristics affect the banks' response to monetary policy shocks. Finally, we assess how the link between bank-specific characteristics and credit supply is affected by global financial conditions and commodity price changes. Our results show that well-capitalized, high-liquidity, low-risk, more profitable banks tend to grant more credit, especially in domestic currency. Moreover, we found evidence that reserve requirements both in domestic and foreign currency are effective in curbing domestic credit in Peru, giving support to the BCRP's active use of RRs as a macroprudential tool to smooth out the credit cycle. Last, we found that banks with more diversified funding sources are less affected after a negative commodity price change.
Length: 33 pages
Creation-Date: 2019-07
File-URL: https://www.bis.org/publ/work803.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work803.htm
File-Format: text/html
Number: 803
Classification-JEL: E44, G21, G32, L25
Keywords: credit channel, monetary policy, credit registry data
Handle: RePEc:bis:biswps:803