Editorial
In this paper, the authors analyze the role of bank capitalization on the transmission of monetary policy, using a quarterly dataset for Austrian banks spanning from 1997 to 2003. A substantial understanding of the transmission mechanism in different countries of the euro zone is not only of academic interest, but also an important prerequisite for central bankers to effectively accomplish their monetary policy goals. While the authors find evidence in favor of the bank lending channel, with an important role active for capitalization, they are unable to confirm whether the bank capital channel is in force in Austria. The results of the paper indicate some counter-cyclicality in lending activity, a finding that is in line with the existing Austrian literature.