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Financial Instability, Uncertainty and Bank Lending Behavior

“Why do banks squeeze their lending activity” is an oft-repeated question during the times of financial crisis. This study examines an emerging economy’s banking system, and contributes to the evolving body of literature on the topic by providing answers to what causes the sluggish bank credit du...

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Main Authors: Swamy, Vigneshwara, Sreejesh, S.
Format: Article
Language:English
Published: Universiti Utara Malaysia 2012
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/25006/1/IJBF%209%204%202012%2074%2095.pdf
http://repo.uum.edu.my/25006/
http://ijbf.uum.edu.my/index.php/previous-issues/148-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-4-2012
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id my.uum.repo.25006
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spelling my.uum.repo.250062018-10-25T00:24:01Z http://repo.uum.edu.my/25006/ Financial Instability, Uncertainty and Bank Lending Behavior Swamy, Vigneshwara Sreejesh, S. HG Finance “Why do banks squeeze their lending activity” is an oft-repeated question during the times of financial crisis. This study examines an emerging economy’s banking system, and contributes to the evolving body of literature on the topic by providing answers to what causes the sluggish bank credit during times of recession. By employing cointegration technique, the study shows that bank credit has a significant positive relationship with the borrowing activities of debt users of the banks, hence, as the contrary an inverse relationship with investment activity is evident during financial crisis. Accordingly, we suggest that banks could increase their lending by increasing the borrowings rapidly either from the Central Banks or from Government supported long term lending institutions during recessionary periods. Universiti Utara Malaysia 2012 Article PeerReviewed application/pdf en http://repo.uum.edu.my/25006/1/IJBF%209%204%202012%2074%2095.pdf Swamy, Vigneshwara and Sreejesh, S. (2012) Financial Instability, Uncertainty and Bank Lending Behavior. The International Journal of Banking and Finance, 9 (4). pp. 74-95. ISSN 1617-722 http://ijbf.uum.edu.my/index.php/previous-issues/148-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-4-2012
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Swamy, Vigneshwara
Sreejesh, S.
Financial Instability, Uncertainty and Bank Lending Behavior
description “Why do banks squeeze their lending activity” is an oft-repeated question during the times of financial crisis. This study examines an emerging economy’s banking system, and contributes to the evolving body of literature on the topic by providing answers to what causes the sluggish bank credit during times of recession. By employing cointegration technique, the study shows that bank credit has a significant positive relationship with the borrowing activities of debt users of the banks, hence, as the contrary an inverse relationship with investment activity is evident during financial crisis. Accordingly, we suggest that banks could increase their lending by increasing the borrowings rapidly either from the Central Banks or from Government supported long term lending institutions during recessionary periods.
format Article
author Swamy, Vigneshwara
Sreejesh, S.
author_facet Swamy, Vigneshwara
Sreejesh, S.
author_sort Swamy, Vigneshwara
title Financial Instability, Uncertainty and Bank Lending Behavior
title_short Financial Instability, Uncertainty and Bank Lending Behavior
title_full Financial Instability, Uncertainty and Bank Lending Behavior
title_fullStr Financial Instability, Uncertainty and Bank Lending Behavior
title_full_unstemmed Financial Instability, Uncertainty and Bank Lending Behavior
title_sort financial instability, uncertainty and bank lending behavior
publisher Universiti Utara Malaysia
publishDate 2012
url http://repo.uum.edu.my/25006/1/IJBF%209%204%202012%2074%2095.pdf
http://repo.uum.edu.my/25006/
http://ijbf.uum.edu.my/index.php/previous-issues/148-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-4-2012
_version_ 1644284199766589440
score 13.211869

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