Borrower versus Ban Channels in Lending: Experimental- and Administrative-Based Evidence

Valentina Michelangeli, Enrico Sette and José-Luis Peydró
Authors registered in the RePEc Author Service: Jose-Luis Peydro

No 1307, Working Papers from Barcelona School of Economics

Abstract: We identify the relative importance for bank lending of borrower (demand-side) versus bank (supply-side) factors. We submit thousands of fictitious mortgage applications, changing one borrower-level factor at time, to the major Italian online mortgage platform. Each application goes to all banks. Borrower and bank factors are equally strong in causing and explaining loan acceptance. For pricing, borrower factors are instead stronger. Moreover, banks supplying less credit accept riskier borrowers. Exploiting the administrative credit register, there is borrower-lender assortative matching, and the bank-level strength measure estimated on the experimental data is associated to credit supply and risk-taking to real firms.

Keywords: banks; credit; risk-taking; mortgages; SMEs (search for similar items in EconPapers)
JEL-codes: E51 G21 G51 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-ure
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Working Paper: Borrower versus bank channels in lending: Experimental- and administrative-based evidence (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1307

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