The Importance of Technology in Banking during a Crisis
Nicola Pierri () and
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Nicola Pierri: https://www.imf.org/en/Research/Researcher-CV/Author/Pierri-Nicola?AuthID=324#Background
No 2022-020, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)
What are the implications of information technology (IT) in banking for financial stability? Data on US banks' IT equipment and the background of their executives reveals that higher pre-crisis IT adoption led to fewer non-performing loans and more lending during the global financial crisis. Empirical evidence indicates a direct role of IT adoption in strengthening bank resilience; this includes instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis shows that high-IT banks originated mortgages with better performance, indicating better borrower screening. No evidence points to offloading of low-quality loans, differences in business models, or enhanced monitoring.
Keywords: Technology; Financial Stability; IT Adoption; Non-Performing Loans; Screening (search for similar items in EconPapers)
JEL-codes: D82 D83 E44 G14 G21 O30 (search for similar items in EconPapers)
Pages: 47 p.
New Economics Papers: this item is included in nep-ban, nep-eff, nep-fdg, nep-ict, nep-mac and nep-pay
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Journal Article: The importance of technology in banking during a crisis (2022)
Working Paper: The importance of technology in banking during a crisis (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2022-20
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