EconPapers    
Economics at your fingertips  
 

Monetary Normalizations and Consumer Credit: Evidence from Fed Liftoff and Online Lending

Christoph Bertsch (), Isaiah Hull () and Xin Zhang
Additional contact information
Xin Zhang: Sveriges Riksbank

International Journal of Central Banking, 2021, vol. 17, issue 71, 47

Abstract: On December 16, 2015, the Federal Reserve initiated "liftoff," a critical step in the monetary normalization process. We use a unique panel data set of 640,000 loan-hour observations to measure the cross-sectional impact of liftoff on interest rates, demand, and supply in the peer-to-peer market for uncollateralized consumer credit. We find that the spread decreased by 17 percent, driven by an increase in supply. Our results are consistent with an investor-perceived reduction in default probabilities and suggest that liftoff provided a strong, positive signal about the future solvency of high credit risk borrowers.

JEL-codes: E25 E42 E52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.ijcb.org/journal/ijcb21q5a7.pdf (application/pdf)
http://www.ijcb.org/journal/ijcb21q5a7.htm (text/html)

Related works:
Working Paper: Monetary Normalizations and Consumer Credit: Evidence from Fed Liftoff and Online Lending (2017) Downloads
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:ijc:ijcjou:y:2021:q:5:a:7

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements ().

 
Page updated 2022-05-09
Handle: RePEc:ijc:ijcjou:y:2021:q:5:a:7