27.07.2012.

New Working Paper: “The bank lending channel in a euroised economy: the case of Serbia”

A new contribution to the working paper series on the NBS website is the paper by Srđan Kujundžić and Dragiša Otašević – “The bank lending channel in a euroised economy: the case of Serbia”. By applying dynamic panel estimation techniques on the balance sheet data for 33 banks, the authors analyse the bank lending channel as part of the monetary transmission mechanism in Serbia. Two different bank loan supply functions are examined according to the currency denomination/indexation of loans. The findings indicate that changes in domestic and foreign reference interest rates affect dinar loan supply. In the case of foreign currency loans, changes in reference rates were not found to be statistically significant, which can be explained by a high share of long-term loans in total foreign currency and foreign currency-indexed loans and a relatively small sample size.

Chief Economist`s Office