CCER讨论稿:Technological Innovation and the Bank Lending Channel of Monetary Policy Transmission

发布日期:2023-12-25 03:08    来源:

E2023014                                                      2023-12-25

Iftekhar Hasan

Xiang Li

Tuomas Takalo



This paper studies whether and how banks’ technological innovations affect the bank lending channel of monetary policy transmission. We first provide a theoretical model in which banks’ technological innovation relaxes firms’ earning-based borrowing constraints and thereby enlarges the response of banks’ lending to monetary policy changes. To test the empirical implications, we construct a patent-based measurement of bank-level technological innovation, which can specify the nature of technology and tell whether it is related to the bank’s lending business. We find that lending-related innovations significantly strengthen the transmission of the bank lending channel.

Keywords: Innovation; FinTech; Monetary Policy Transmission; Bank Lending Channel

JEL Codes: E52; G21; G23