Credit supply - Identifying balance-sheet channels with loan applications and granted loans

Gabriel Jimenez, Steven Ongena, Jose-Luis Peydro and Jesús Saurina

No 1179, Working Paper Series from European Central Bank

Abstract: To identify credit availability we analyze the extensive and intensive margins of lending with loan applications and all loans granted in Spain. We find that during the period analyzed both worse economic and tighter monetary conditions reduce loan granting, especially to firms or from banks with lower capital or liquidity ratios. Moreover, responding to applications for the same loan, weak banks are less likely to grant the loan. Our results suggest that firms cannot offset the resultant credit restriction by turning to other banks. Importantly the bank-lending channel is notably stronger when we account for unobserved time-varying firm heterogeneity in loan demand and quality. JEL Classification: E32, E44, E5, G21, G28

Keywords: 2007-09 crisis; business cycle; capital; credit channel; credit supply; financial accelerator; firm borrowing capacity; liquidity; monetary policy; net worth; non-financial and financial borrower balance-sheet channels (search for similar items in EconPapers)
Date: 2010-04
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 (28)

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Related works:
Working Paper: Credit supply: identifying balance-sheet channels with loan applications and granted loans (2010)
Working Paper: Credit Supply: Identifying Balance-Sheet Channels with Loan Applications and Granted Loans (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20101179

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