The real effects of the bank lending channel
This paper studies credit booms exploiting the Spanish matched credit register over 2001–2009. We extend Khwaja and Mian’s (2008) loan-level estimator by incorporating firm-level general equilibrium adjustments. Higher ex-ante bank real-estate exposure increases credit supply to non-real-estate firm...
| Authors: | ; ; ; |
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| Format: | Article |
| Status: | Published version |
| Publication date: | 2019 |
| Country: | España |
| Institution: | Universitat Pompeu Fabra |
| Repository: | Repositorio Digital de la UPF |
| OAI Identifier: | oai:repositori.upf.edu:10230/37077 |
| Online Access: | http://hdl.handle.net/10230/37077 http://dx.doi.org/10.1016/j.jmoneco.2019.06.002 |
| Access Level: | Open access |
| Keyword: | Bank lending channel Real effects of credit Credit supply booms Real estate Securitization |
| Summary: | This paper studies credit booms exploiting the Spanish matched credit register over 2001–2009. We extend Khwaja and Mian’s (2008) loan-level estimator by incorporating firm-level general equilibrium adjustments. Higher ex-ante bank real-estate exposure increases credit supply to non-real-estate firms, but effects are neutralized by firm-level adjustments for firms with existing banking relationships. However, higher bank real-estate exposure increases risk-taking, by relaxing standards of existing borrowers (cheaper, longer-term and less collateralized credit), and by expanding credit on the extensive margin to first-time borrowers that default substantially more. Results suggest that the mechanism at work is greater liquidity via securitization of real-estate assets. |
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