Table 4
Main banks’ balance sheet items as a percentage of the total assets according to bank
according to bank capitalisation
|
6 most capitalised |
4 medium |
8 less capitalised | |||||||
|
1992 |
1995 |
1998 |
1992 |
1995 |
1998 |
1992 |
1995 |
1998 | |
|
Assets | |||||||||
|
Credit to private sector |
43.7 |
41.9 |
39.9 |
42.4 |
37.3 |
41.3 |
42.3 |
36.5 |
35.6 |
|
Domestic money |
2.9 |
2.9 |
0.9 |
2.6 |
4.1 |
6.9 |
1.7 |
2.4 |
3.6 |
|
Government |
10.6 |
10.6 |
2.3 |
19.0 |
12.3 |
6.1 |
21.8 |
15.4 |
5.6 |
|
Deposits in |
10.7 |
15.1 |
12.7 |
5.8 |
16.6 |
12.7 |
4.8 |
11.7 |
8.4 |
|
Liabilities | |||||||||
|
Deposits of |
55.3 |
47.4 |
33.8 |
65.2 |
57.6 |
47.7 |
68.1 |
54.1 |
38.1 |
|
Domestic money |
3.4 |
4.2 |
2.6 |
1.8 |
3.6 |
6.3 |
2.4 |
2.5 |
3.3 |
|
Capital |
11.2 |
9.5 |
5.0 |
10.0 |
8.4 |
6.9 |
8.4 |
6.4 |
4.9 |
|
Deposits of |
11.9 |
18.5 |
16.1 |
5.7 |
12.3 |
15.9 |
4.9 |
10.1 |
14.3 |
As we have seen the intensification of credit growth in 1998 is likely to be the result
of a progressively reduced exchange risk, which strongly reduced the “true” cost of
external financing, not captured by our available measure. For this reason we think that it
is not sensible to use data later than 1997 to test the existence and importance of the credit
channel, at the country level, for EU countries, because monetary policy was no longer set
at the country level and the funds available to the banks were also no longer defined at the
country level.
Of course this option further reduces the time dimension of our panel to eight years
of quarterly data, which may appear as a very short sample given the cointegration
approach followed in this paper. We notice however that in case of panel data the cross-
23
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