Monetary Policy Transmission and the Funding Structure of Banks

@inproceedings{Williams2017MonetaryPT,
  title={Monetary Policy Transmission and the Funding Structure of Banks},
  author={Emily Jean Williams},
  year={2017}
}
I document size-related financing frictions at U.S. commercial banks and show that these frictions lead to a reduction in bank lending when the Federal Reserve raises interest rates. I identify these effects by exploiting a natural experiment using antitrust related bank branch divestitures in which branches are divested from large banks to small banks such that the market structure remains unchanged. Consistent with the existence of financing frictions in a framework where deposit demand is a… CONTINUE READING

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