How do banks propagate economic shocks?

Yusuf Emre Akgunduz, Seyit Cilasun (), H. Ozlem Dursun-de Neef, Yavuz Selim Hacihasanoglu and Ibrahim Yarba

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper exploits the COVID-19 pandemic as a negative shock on firm revenues in affected industries and studies the transmission of this shock via banks. We use the ex-ante heterogeneity in the amount of loans issued to affected industries to measure the variation in banks' exposure to the negative shock. Using bank-firm level credit register data from Turkey, we show that banks transmitted the negative shock with a reduction in their loan supply not only to affected but also unaffected industries. The effect persists at the firm level, but is reduced for large firms and firms with existing relationships to state-owned banks.

Keywords: Bank loan supply; Economic shocks propagation; COVID-19 pandemic; Bank lending channel; Firm borrowing channel (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 G32 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ara, nep-ban, nep-cba, nep-cwa, nep-fdg and nep-isf
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2021/21-24 (application/pdf)

Related works:
Working Paper: How Do Banks Propagate Economic Shocks? (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2124

Access Statistics for this paper

More papers in Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey Contact information at EDIRC.
Bibliographic data for series maintained by Sermet Pekin () and Ilker Cakar () and ().