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AuthorQanas, Jalal
AuthorRaza, Hamid
Available date2023-02-27T07:46:55Z
Publication Date2021-03-30
Publication NameReview of Political Economy
Identifierhttp://dx.doi.org/10.1080/09538259.2021.1882190
CitationQanas, J., & Raza, H. (2022). Does securitisation make monetary policy less effective?. Review of Political Economy, 34(1), 107-123.
ISSN0953-8259
URIhttps://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85103410745&origin=inward
URIhttp://hdl.handle.net/10576/40439
AbstractWe re-examine the role of monetary policy and its transmission mechanism through the credit channel while focusing on securitisation. We empirically investigate the interactions between securitisation activities and monetary policy using data from 1995 to 2015 for a panel of 10 European countries. We employ a panel VAR model, and estimate it using a GMM system. Our findings indicate that a contractionary monetary policy shock immediately increases securitisation activities and decreases the growth rate of traditional (non-securitised) loans. The evidence supports the argument that merely raising interest rate is not sufficient to control credit booms, but, on the contrary, may induce credit intermediation, which in turn can increase system risk. Any modern central bank should re-examine and redefine its role as a ‘banker’s bank’ taking into consideration the future developments in shadow banking and financial innovation in order to ensure financial stability.
SponsorOpen Access funding provided by the Qatar National Library.
Languageen
PublisherTaylor & Francis
Subjectfinancial stability
Monetary policy
shadow banking and securitisation
TitleDoes Securitisation Make Monetary Policy Less Effective?
TypeArticle
Pagination107-123
Issue Number1
Volume Number34
ESSN1465-3982
dc.accessType Open Access


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