Details

Autor(en) / Beteiligte

• Wong, Chin‐Yoong
• Eng, Yoke‐Kee

Titel

P2P finance and the effectiveness of monetary controls

Ist Teil von

• The Manchester school, 2020-07, Vol.88 (4), p.617-639

Ort / Verlag

Manchester: Blackwell Publishing Ltd

Erscheinungsjahr

2020

Quelle

Business Source Ultimate

Beschreibungen/Notizen

• The emergence of a decentralized peer‐to‐peer (P2P) platform that matches lending and borrowing without collateral requirement could have weakened the bank lending and balance sheet channels of monetary policy, calling monetary policy effectiveness into question. Through the perspective of a new Keynesian model expanded with a two‐sided P2P platform and group identity, we find that monetary policy can be financially destabilizing when firms have access to alternative unregulated financing instruments to dodge monetary grabs. Contractionary monetary policy that aims to disincentivize leverage could unintendedly end up with elevated debt leverage. Although the economy largely responds to productivity and investment shocks as intended by the policy, the responses become more volatile, indicating the weakening monetary grips on the economy.