Introduction

The French monetary and financial markets were largely restructured in the 1980s, to allow in particular a better access of economic agents to market finance. However, bank-lending still remains a major source of finance for French firms and households. Then, a bank-lending channel is worth considering. Indeed, the population of Monetary and Financial Institutions (MFIs) is, in France as in many other countries, quite heterogeneous. Strong discrepancies can be observed across banks (e.g. in terms of legal structure, size and structure of their balance sheet) and information asymmetries between banks and their funds providers cannot be ruled out.

Unfortunately, previous work, based either on macro VAR models or on microeconometric estimates, is not very conclusive. In particular, Favero, Giavazzi and Flabbi (2001), in their comparative multinational study based on bank balance sheets from the BankScope database, do not find strong evidence of a bank lending channel in France. On the contrary, Martin and Rosenwald (1996) and Rosenwald (1998), using information about the rates at which banks issue CDs, find some differences across banks and thus cannot reject the existence of a lending channel. However, the latter find it to be of a rather small magnitude.

The present chapter fits, partly, in this literature. Its aim is to add a piece to the available evidence by looking at the way, depending on the banks' characteristics, the outstanding amount of bank loans responds to policy shocks.