Mercredi | 2012-06-26
Samouel Beji – Aram BELHADJ
Most of the works related to monetary policy transmission mechanisms did not take into account the special case of developing countries. In these countries, given their features (exchange rate rigidity, financial fragility, banking prominence, etc.), it seems that the most reliable monetary transmission mechanism is the lending channel. The purpose of this paper is to focus specifically on this channel in 18 MENA Countries by using a GMM system on dynamic panel aggregated data from 1990 to 2009. We regress credit volume on the instrument of monetary policy. Meanwhile, we add many control variables to resolve the supply-demand puzzle. Thereafter, we include variables describing the sensitiveness of the lending behavior to the institutional environment quality as well as to key bank characteristics. Our results suggest that the lending channel is operational in MENA Countries. Moreover, lending activity could be positively affected by an efficient institutional framework as well as the size and liquidity of the banking sector, while, on the contrary, it could be negatively affected by banking concentration.