... for the bank lending channel in Sri Lanka The growth of the non-banking financial sector such as the emergence of non -bank financial institutions, unit trusts, insurance companies, the growth of ... weakening the bank lending channel Therefore, given the rapid changes in the financial sector and the relative importance of banks as a source of funding, it is important to ascertain whether bank ... analyze the existence of a bank lending channel in Sri Lanka This paper employs a Vector Error Correction Model (VECM) to estimate the demand for and the supply of bank loans in the context of aggregate...