(State University of Maringá, Brazil)

Abstract: The objective of this study is to investigate the presence of the credit channel in transmitting monetary policy in Brazil from 2014 to 2022. The methodology used is based on Akinci et al. (2013) and allows for the assessment of how macroeconomic variables (such as Selic, GDP, and inflation) and bank characteristics (like size, liquidity, and capitalization) affect credit operations. Panel data and econometric estimations are used to measure the influence of these variables on credit supply. Stacked panel, fixed-effects, and random-effects models are estimated, and tests are conducted to determine the best model. The results support the hypothesis of the credit channel's presence in Brazil, with Selic showing significance in all models and with the expected impact. Additionally, liquidity is the only bank characteristic found to be significant, indicating that more liquid institutions are more responsive to monetary policy. Inflation is found to be relevant in all models, with the expected impact, while GDP is not a significant proxy for credit demand. In conclusion, the findings confirm the importance of the credit channel in transmitting monetary policy in Brazil and emphasize the crucial role of banks' liquidity in this process.