The importance of technology in banking during a crisis

Yannick Timmer and Niccola Pierri

No 117, ESRB Working Paper Series from European Systemic Risk Board

Abstract: We study the implications of information technology (IT) in banking for financial stability, using data on US banks’ IT equipment and the tech-background of their executives. We find that one standard deviation higher pre-crisis IT adoption led to 10% fewer non-performing loans during the global financial crisis. We present several pieces of evidence that indicate a direct role of IT adoption in strengthening bank resilience; these include instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis reveals that high-IT adoption banks originated mortgages with better performance and did not offload low-quality loans. JEL Classification: O3, G21, G14, E44, D82, D83

Keywords: financial stability; it adoption; non-performing loans; technology (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-eff and nep-ict
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: The importance of technology in banking during a crisis (2022)
Working Paper: The Importance of Technology in Banking during a Crisis (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:srk:srkwps:2021117

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