Trade Uncertainty and U.S. Bank Lending
Ricardo Correa,
Julian di Giovanni,
Linda Goldberg and
Camelia Minoiu
No 2024-16, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta
Abstract:
This paper uses U.S. credit register data and the 2018–19 Trade War to study the effects of uncertainty on domestic credit supply. Exploiting differences in banks' ex-ante 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: uncertainty; bank loans; trade finance; credit supply; trade war (search for similar items in EconPapers)
JEL-codes: F34 F42 G21 (search for similar items in EconPapers)
Pages: 66
Date: 2024-10-18
New Economics Papers: this item is included in nep-int
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Published in 2024
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https://www.atlantafed.org/-/media/documents/resea ... -us-bank-lending.pdf Full text (application/pdf)
Related works:
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) 
Working Paper: Trade Uncertainty and U.S. Bank Lending (2023) 
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedawp:99199
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DOI: 10.29338/wp2024-16
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