Collateral and credit

Hans Degryse, Olivier De Jonghe, Luc Laeven and Tong Zhao

No 3095, Working Paper Series from European Central Bank

Abstract: This paper studies the role of collateral using the euro area corporate credit registry, Ana-Credit. We document key facts about the importance, distribution, and composition of collateral, including its presence, types, and values. On average, 70% of credit amounts are collateralized. Real estate and financial assets are the most pledged, while physical movable assets and other intangible assets are less present. In addition, we show that the aggregate collateral value pledged to the banking sector is substantial, driven mainly by real estate in most countries. For the first time, we examine the collateral channel in bank credit using the actual value of individual collateral. By exploiting within-firm and within-bank variations for newly issued secured loans, we find that the elasticity of collateral value to loan commitment amounts is around 0.7-0.8. This collateral value elasticity exhibits substantial country and time heterogeneity, which can be explained by legal, financial, and macro conditions. JEL Classification: E32, G21, G33

Keywords: bank credit; collateral channel; corporate financing; secured debt (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-cfn, nep-eec, nep-fdg, nep-ifn and nep-mon
Note: 261593
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Working Paper: Collateral and credit (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253095

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