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Beirne, John, Renzhi, Nuobu and Volz, Ulrich (2023) 'Non-Bank Finance and Monetary Policy Transmission in Asia.' Emerging Markets Finance and Trade, 59 (6). pp. 1976-1991.

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Focusing on Asian economies over the period 2006 to 2019, we find that while non-bank finance appears to complement rather than substitute credit provision by the traditional banking sector, weaker regulatory quality is an important driving factor. Moreover, while we find that central bank policy rates countercyclically affect credit provision by non-banks, impulse responses to monetary policy shocks with and without non-bank finance indicate that the effectiveness of monetary policy as a transmission channel to GDP growth, inflation, house prices, and traditional bank credit is weakened in the presence of non-bank finance. Our paper has implications for monetary policy implementation, potentially incorporating non-banks into central bank operations and liquidity provision, as well as for financial supervisors on mitigating regulatory arbitrage.

Item Type: Journal Article
Keywords: Non-bank finance; fintech; monetary policy; Asia
SOAS Departments & Centres: Regional Centres and Institutes > Centre of South East Asian Studies
Regional Centres and Institutes > SOAS China Institute
Departments and Subunits > Department of Economics
ISSN: 1540496X
DOI (Digital Object Identifier):
Date Deposited: 11 Jan 2023 17:12

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