Ffea_The Effect of Monetary Policy Transmission on Bank Industry Structure: From the Perspective of the Bank Lending Channel in Cote D’Ivoire

This article examines the influence of the mechanism of monetary policy transmission on structure of bank industry through the use of the bank lending channel in Cote d’Ivoire. Using a panel sample of 30 commercials banks from 2008 to 2017. Employing a dynamic model using two step system generalized method of moments, we exploit the variation in lending rate and policy rate as though monetary indicators and examine the influence of monetary transmission on banking industry. This study find that (i) the transmission of bank lending has becomes weak when the bank gets associated in Nontraditional operations, (ii) promoting effective monetary transmission by foreign exchange reserve, no net effect with open market operations, (iii) weaking influence with whole bank categories, though consolidation influence for the banks with broad capital buffers against crises. Our finding suggests that regulators should consider under industrial policy that favors efficient banking sectors, they likewise have to elaborate the monetary instruments to apply for diverse categories of banking industries can lead to speed up the financial development.