Interbank Liquidity Crunch and the Firm Credit Crunch: Evidence from the 2007--2009 Crisis
Jose-Luis Peydro (),
Samuel da-Rocha-Lopes and
Antoinette Schoar ()
Authors registered in the RePEc Author Service: Samuel Da-Rocha Lopes
Review of Financial Studies, 2014, vol. 27, issue 1, 347-372
We study the credit supply effects of the unexpected freeze of the European interbank market, using exhaustive Portuguese loan-level data. We find that banks that rely more on interbank borrowing before the crisis decrease their credit supply more during the crisis. The credit supply reduction is stronger for firms that are smaller, with weaker banking relationships. Small firms cannot compensate the credit crunch with other sources of debt. Furthermore, the impact of illiquidity on the credit crunch is stronger for less solvent banks. Finally, we find no overall positive effects of central bank liquidity but instead higher hoarding of liquidity. The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: firstname.lastname@example.org., Oxford University Press.
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Journal Article: Interbank Liquidity Crunch and the Firm Credit Crunch: Evidence from the 2007-2009 Crisis (2014)
Working Paper: Interbank Liquidity Crunch and the Firm Credit Crunch: Evidence from the 2007-2009 Crisis (2013)
Working Paper: Interbank liquidity crunch and the firm credit crunch: Evidence from the 2007-2009 crisis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:rfinst:v:27:y:2014:i:1:p:347-372
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