Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297482 
Year of Publication: 
2019
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 13 [Issue:] 3 [Year:] 2019 [Pages:] 253-268
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
This paper examines the effectiveness of the bank lending channel in a dual banking system in Malaysia, where both conventional and Islamic banks operate alongside each other. It also investigates the impact of bank competition on lending channels in financial systems. Using panel data from both Islamic and conventional banks in Malaysia, our findings indicate the ineffectiveness of the bank lending channel. Further, the empirical results suggest that the impact of monetary policy on bank lending does not depend on bank competition. In other words, the effectiveness of the lending transmission channel does not depend on the market power of the individual banks. Furthermore, the effectiveness of the lending channel appears to be independent of whether the bank is Islamic or conventional. This result is probably explained by the fact that the vast majority of Islamic banks in Malaysia are subsidiaries of conventional banks. Policymakers therefore do not need to differentiate between conventional and Islamic banks in regard to the effectiveness of the bank lending channel.
Subjects: 
Bank competition
Bank lending channel
Dual banking system
Islamic banking
Monetary policy
JEL: 
G21
G28
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.