Nonbanks, Banks, and Monetary Policy: U.S. Loan-Level Evidence since the 1990s

Peydró, José-Luis, David Elliott, Ralf Meisenzahl and Bryce C. Turner
Authors registered in the RePEc Author Service: Jose-Luis Peydro

No 14989, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We show that nonbanks (funds, shadow banks, fintech) affect the transmission of monetary policy to output, prices and the distribution of risk via credit supply. For identification, we exploit exhaustive US loan-level data since the 1990s, borrower-lender relationships and Gertler-Karadi monetary policy shocks. Higher policy rates shift credit supply from banks to nonbanks, thereby largely neutralizing associated consumption effects (via consumer loans), while just attenuating firm investment and house price spillovers (via corporate loans and mortgages). Moreover, different from the risk-taking channel, higher policy rates increase risk-taking, as less-regulated, more fragile nonbanks -in all credit markets- expand supply, especially to riskier borrowers.

Keywords: Nonbank intermediaries; Banks; Monetary policy transmission; Household and corporate loans; Credit and risk-taking channel (search for similar items in EconPapers)
JEL-codes: E51 E52 G21 G23 G28 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-ban, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Nonbanks, Banks, and Monetary Policy: U.S. Loan-Level Evidence since the 1990s (2019)
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