Do better capitalized and bigger banks recover faster from a pandemic-led shock? Evidence from US Banks’ lending behavior

E. Augeraud-Véron, W. Boungou and P. Gupta

Economic Modelling, 2025, vol. 151, issue C

Abstract: This paper examines the impact of the COVID-19 pandemic (and vaccination rollout) on banks’ lending behavior. Using a theoretical model and an empirical study based on data from 4,995 US banks between 2019Q2 and 2022Q1, we find that mortality rates and new infections significantly reduce mortgage and commercial lending, albeit to a different degree. Nevertheless, we show empirically, for the first time in the literature on health shocks, that post-vaccination recovery from pandemic-induced shocks is faster for large size banks and better capital buffers. These results provide key insights for policy makers and financial institutions, highlighting that the specific characteristics of banks play an important role in shaping responses to the pandemic.

Keywords: Lending behavior; COVID-19; Vaccination (search for similar items in EconPapers)
JEL-codes: E44 E52 G21 G28 I15 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999325001749
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecmode:v:151:y:2025:i:c:s0264999325001749

DOI: 10.1016/j.econmod.2025.107179

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().