How financial shocks transmit to the real economy? Banking business models and firm size

Frederic Vinas

Journal of Banking & Finance, 2021, vol. 123, issue C

Abstract: The paper analyzes the credit supply of commercial banks and universal banks over the 2003–2009 period. Relying on a unique database of credits, banks and firms covering more than 8000 firms from SMEs to large firms, I show that universal banks and commercial banks had a similar credit supply prior to the crisis. However, during the 2008 financial crisis, universal banks had a strongly lower credit supply, leading to real effects on firms’ investment. An analysis of transmission channels highlights a specific binding constraint applying to universal banks: their liquidity risk through off-balance-sheet commitments. While smallest firms are usually considered more vulnerable, the paper shows that small firms were less impacted by credit rationing than medium and large firms due to their bank-firm relationships prior to the crisis.

Keywords: Bank; Crisis; Business model; Universal bank; Liquidity risk; Firm size; Investment (search for similar items in EconPapers)
JEL-codes: G01 G21 G24 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426620302703
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:jbfina:v:123:y:2021:i:c:s0378426620302703

DOI: 10.1016/j.jbankfin.2020.106009

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().