Bank lending and small and medium-sized enterprises’ access to finance – Effects of macroprudential policies

Aida Ćehajić and Marko Košak

Journal of International Money and Finance, 2022, vol. 124, issue C

Abstract: This paper examines the impact of macroprudential policies on small and medium-sized firms' access to bank finance. To this end, we use data from a firm-level survey covering European Union (EU) countries between 2009 and 2017, as well as a recently published database on the use of macroprudential policies in EU countries, the Macroprudential Policies Evaluation Database (MaPPED), which allows us to separately consider the tightening and loosening macroprudential policy measures. We develop several macroprudential indices based on the target of the macroprudential instruments. The results reveal a significant relationship between macroprudential indices and firms' access to finance. The indices are mainly associated with limited access to bank credit for SMEs, taking different firm- and country-level characteristics into account. While use of macroprudential measures could lead to higher capitalisation and make the financial sector more resilient and reduce its risk exposure, this could also mean restricted lending to firms, especially smaller firms with fewer financing options and considerable reliance on bank credit.

Keywords: Macroprudential policy; Bank lending; Small and medium-sized enterprises; Access to finance (search for similar items in EconPapers)
JEL-codes: E51 E58 G21 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:124:y:2022:i:c:s0261560622000158

DOI: 10.1016/j.jimonfin.2022.102612

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