Investigating the Asymmetric Effects of Economic Factors on the Level of Bank Facilities

Abstract

In Iran's economy, most of the financial resources needed by economic enterprises are provided through the granting of facilities by the banking network. Therefore, studying the factors affecting banking facilities in the private sector in Iran's economy is of particular importance. In this article, we investigate the factors affecting the facilities granted by banks using quarterly data from the Iranian economy from 1379 to 1399 with the nonlinear Markov switching approach. A non-linear approach was used because bank facilities show different effects of economic factors during periods of credit and commercial boom and bust. The results of the research show that the economic growth rate, the interest rate of facilities and the growth rate of bank deposits have a positive relationship with the growth of real facilities and the interest rate of bank deposits has a negative effect on it, but the degree of influence of each of the economic factors on the growth rate of real facilities is different in every cycle. This asymmetric impact of macroeconomic factors during different cyclical periods is important in policymaking and should be taken into consideration when making monetary policy.

Keywords

• banking network
• credit
• markov switching
• transition probability