Effect of Monetary Policy on the Financial Strength of Banks Given the Strength of the Banking Crisis

The effect of monetary policy on bank resources affects the lending power of banks. Savings deposits are the main bank resources which cannot be substituted. So it is important for banks to manage liquidity. Liquidity management of banks includes factors affecting the strength of the banks in liquidity crisis. In this paper, the effect of monetary policy on bank lending power based on the strength of the banks in crisis according to their balance sheet and profit and loss statistics between 1385 and 1390 is studied. The effect of monetary policy on bank lending power of the banks is also investigated. Therefore, a hypothesis that is being tested is: In the banks with high strength in critical conditions monetary policy has a positive relationship with the lending power.