Big techs and the credit channel of monetary policy

Fiorella De Fiore, Leonardo Gambacorta and Cristina Manea

No 1088, BIS Working Papers from Bank for International Settlements

Abstract: We document some stylized facts on big tech credit and rationalize them through the lens of a model where big techs facilitate matching on the e-commerce platform and extend loans. The big tech reinforces credit repayment with the threat of exclusion from the platform, while bank credit is secured against collateral. Our model suggests that: (i) a rise in big techs' matching efficiency increases the value for firms of trading on the platform and the availability of big tech credit; (ii) big tech credit mitigates the initial response of output to a monetary shock, while increasing its persistence; (iii) the efficiency gains generated by big techs are limited by the distortionary fees collected from users.

Keywords: Big Techs; monetary policy; credit frictions (search for similar items in EconPapers)
JEL-codes: E44 E51 E52 G21 G23 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Big Techs and the Credit Channel of Monetary Policy (2023)
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