Fintech vs bank credit: How do they react to monetary policy?

Giulio Cornelli, Fiorella De Fiore, Leonardo Gambacorta and Cristina Manea

No 1157, BIS Working Papers from Bank for International Settlements

Abstract: Fintech credit, which includes peer-to-peer and marketplace lending as well as lending facilitated by major technology firms, is witnessing rapid growth worldwide. However, its responsiveness to monetary policy shifts remains largely unexplored. This study employs a novel credit dataset spanning 19 countries from 2005 to 2020 and conducts a PVAR analysis to shed some light on the different reaction of fintech and bank credit to changes in policy rates. The main result is that fintech credit shows a lower (even non-significant) sensitivity to monetary policy shocks in comparison to traditional bank credit. Given the still marginal – although fast growing – macroeconomic significance of fintech credit, its contribution in explaining the variability of real GDP is less than 2%, against around one quarter for bank credit.

Keywords: fintech credit; monetary policy; PVAR; collateral channel (search for similar items in EconPapers)
JEL-codes: D22 G31 R30 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-fmk, nep-inv, nep-mon and nep-pay
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Related works:
Journal Article: Fintech vs bank credit: How do they react to monetary policy? (2024)
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