Dampening the financial accelerator? Direct lenders and monetary policy

Ryan Banerjee and Jose Maria Serena Garralda

No 979, BIS Working Papers from Bank for International Settlements

Abstract: Direct lenders, non-bank credit intermediaries with low leverage, have become increasingly important players in corporate loan markets. In this paper we investigate the role they play in the monetary policy transmission mechanism, using syndicated loan data covering the 2000-2018 period. We show that direct lenders are more likely to join loan syndicates whenever monetary policy announcements trigger a contraction in borrowers' net worth irrespective of the directional change in interest rates. Thus, our findings suggest that direct lenders dampen the financial accelerator channel of monetary policy.

Keywords: direct lending; monetary policy; financial accelerator; credit channel (search for similar items in EconPapers)
JEL-codes: F32 F34 G21 G32 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-11
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cwa, nep-fdg, nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Dampening the financial accelerator? direct lenders and monetary policy (2021)
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