EconPapers    
Economics at your fingertips  
 

Stress Tests and Small Business Lending

Kristle Cortes, Yuliya Demyanyk (), Lei Li, Elena Loutskina and Philip E. Strahan

No 1802, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Post-crisis stress tests have altered banks? credit supply to small business. Banks affected by stress tests reduce credit supply and raise interest rates on small business loans. Banks price the implied increase in capital requirements from stress tests where they have local knowledge, and exit markets where they do not, as quantities fall most in markets where stress-tested banks do not own branches near borrowers, and prices rise mainly where they do. These reductions in supply are concentrated among risky borrowers. Stress tests do not, however, reduce aggregate credit. Small banks increase their share in geographies formerly reliant on stress-tested lenders.

Keywords: small business lending; stress tests; credit supply; large banks (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2018-03-01
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.26509/frbc-wp-201802 Full text (text/html)

Related works:
Journal Article: Stress tests and small business lending (2020) Downloads
Working Paper: Stress Tests and Small Business Lending (2018) Downloads
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:fip:fedcwp:1802

Ordering information: This working paper can be ordered from

DOI: 10.26509/frbc-wp-201802

Access Statistics for this paper

More papers in Working Papers (Old Series) from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().

 
Page updated 2022-09-26
Handle: RePEc:fip:fedcwp:1802