{"title":"The effects of quantitative easing policy on bank lending: Evidence from Japanese regional banks","authors":"Kozo Harimaya , Toshiki Jinushi","doi":"10.1016/j.japwor.2023.101193","DOIUrl":null,"url":null,"abstract":"<div><p><span>This paper examines the response of Japanese regional banks to the quantitative easing operations conducted by the Bank of Japan (BOJ) using semiannual bank-level data from 2001 to 2020. Many regional banks predominantly focus on lending business in their local areas so that, unlike some previous literature, we control for the local economic conditions. We found that, compared with the pre-QQE period, the BOJ’s government bond purchase has a remarkably greater impact on regional bank’s lending after the introduction of QQE. These results suggest that the QQE policy is quite effective in promoting bank lending. Regarding the differences in bank characteristics, the magnitude of impact is larger for regional banks with a higher </span>NPL<span> ratio, a larger asset size, and a lower market share. The first result is consistent with the findings of Bowman et al. (2015) and Matousek et al. (2019), whereas the second and third results are novel. The Granger causality tests produce consistent results.</span></p></div>","PeriodicalId":46744,"journal":{"name":"Japan and the World Economy","volume":"67 ","pages":"Article 101193"},"PeriodicalIF":1.3000,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Japan and the World Economy","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0922142523000191","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
This paper examines the response of Japanese regional banks to the quantitative easing operations conducted by the Bank of Japan (BOJ) using semiannual bank-level data from 2001 to 2020. Many regional banks predominantly focus on lending business in their local areas so that, unlike some previous literature, we control for the local economic conditions. We found that, compared with the pre-QQE period, the BOJ’s government bond purchase has a remarkably greater impact on regional bank’s lending after the introduction of QQE. These results suggest that the QQE policy is quite effective in promoting bank lending. Regarding the differences in bank characteristics, the magnitude of impact is larger for regional banks with a higher NPL ratio, a larger asset size, and a lower market share. The first result is consistent with the findings of Bowman et al. (2015) and Matousek et al. (2019), whereas the second and third results are novel. The Granger causality tests produce consistent results.
期刊介绍：
The increase in Japan share of international trade and financial transactions has had a major impact on the world economy in general and on the U.S. economy in particular. The new economic interdependence between Japan and its trading partners created a variety of problems and so raised many issues that require further study. Japan and the World Economy will publish original research in economics, finance, managerial sciences, and marketing that express these concerns.
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