Housing Bust, Bank Lending & Employment: Evidence from Multimarket Banks

David Glancy

No 2017-118, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: I use geographic variation in bank lending to study how bank real estate losses impacted the supply of credit and employment during the Great Recession. Banks exposed to distressed housing markets cut mortgage and small business lending relative to other banks in the same county. This lending contraction had real e?ects, as counties whose banks were exposed to adverse shocks in other markets su?ered employment declines, especially in young ?rms. This ?nding is robust to instrumenting for bank exposure to housing shocks using shocks in distant markets, exposure based on historical lending, or exposure to markets with inelastic housing supply.

Keywords: Bank lending; Employment; Financial crisis; Residential real estate (search for similar items in EconPapers)
JEL-codes: E24 E44 G21 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-12-01
New Economics Papers: this item is included in nep-ban, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Housing bust, bank lending & employment: Evidence from multimarket banks (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2017-118

DOI: 10.17016/FEDS.2017.118

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