Determinants of credit growth and the bank lending channel in Peru: a loan level analysis

BIS Working Papers

No 803

 

Determinants of credit growth and the bank lending channel in Peru: a loan level analysis

by José Bustamante, Walter Cuba and Rafael Nivin

 

Monetary and Economic Department

July 2019

 

JEL classification: D22, D84, E31

Keywords: inflation expectations, firms' survey, new information.

This publication is available on the BIS website (www.bis.org).

 

© Bank for International Settlements 2019. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated.

ISSN 1020-0959 (print)

ISSN 1682-7678 (online)

 

Determinants of credit growth and the bank lending channel in Peru: a loan level analysis

by José Bustamante, Walter Cuba and Rafael Nivin

 

Abstract

This paper uses loan-level data from Peru’s credit registry to determine how the role of bankspecific 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,

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