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The real effects of universal banking on firms’ investment: Micro-evidence from 2004-2009

Frederic Vinas

Débats économiques et financiers from Banque de France

Abstract: Most studies analyzing the transmission of financial shocks to the real economy fail to uncover real effects at firm level. Taking into account banks' business models, this article attempts to fix that issue. Two banking models are considered: traditional and universal banks, the latter providing sophisticated financial services (market-making on derivatives, management of large commitments). Relying on a unique database on credits, banks and firms covering more than 5,000 firms over 2004-2009, the paper shows that in period of high liquidity, both models have a similar credit supply, but in liquidity crisis, universal banks had a significantly lower credit supply, contrary to traditional banks, leading to real effects on firm’s investment.

Keywords: Crisis; Retail Bank; Universal Bank; Firm; Credit; Credit Line; Maturity; Long-Term Credit; Short-Term Credit; Liquidity; Investment. (search for similar items in EconPapers)
JEL-codes: E22 E51 G01 G21 G24 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2016
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn and nep-mac
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