Trade Uncertainty and U.S. Bank Lending

Ricardo Correa, Julian di Giovanni, Linda Goldberg and Camelia Minoiu

No 18631, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper uses U.S. credit register data and the 2018–2019 Trade War to study the effects of uncertainty on domestic credit supply. Exploiting differences in banks’ exante exposure to trade uncertainty, we find that increased uncertainty is associated with a broad lending contraction across their customer firms. This result is consistent with banks responding to uncertainty with wait-and-see behaviors, where more exposed banks curtail risky exposures, reduce loan maturities, and adjust loan supply along both intensive and extensive margins. The lending contraction is larger for more capital-constrained banks and has significant real effects, especially for bank-dependent firms.

Keywords: Trade uncertainty; Bank loans; Trade finance; Global value chains; Trade war (search for similar items in EconPapers)
JEL-codes: F34 F42 G21 (search for similar items in EconPapers)
Date: 2023-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18631 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Trade Uncertainty and U.S. Bank Lending (2024)
Working Paper: Trade Uncertainty and U.S. Bank Lending (2023)
Working Paper: Trade Uncertainty and U.S. Bank Lending (2023)
Working Paper: Trade Uncertainty and U.S. Bank Lending (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18631

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18631

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().