EconPapers    
Economics at your fingertips  
 

Some borrowers are more equal than others: Bank funding shocks and credit reallocation

Olivier De Jonghe (), Hans Dewachter, Klaas Mulier, Steven Ongena () and Glenn Schepens

No 361, Working Paper Research from National Bank of Belgium

Abstract: This paper provides evidence on the strategic lending decisions made by banks facing a negative funding shock. Using bank-firm level credit data, we show that banks reallocate credit within their loan portfolio in at least three different ways. First, banks reallocate to sectors where they have a high market share. Second, they also reallocate to sectors in which they are more specialized. Third, they reallocate credit towards low-risk _rms. These reallocation effects are economically large. A standard deviation increase in sector market share, sector specialization or firm soundness reduces the transmission of the funding shock to credit supply by 22, 8 and 10 %, respectively.

Keywords: Credit reallocation; bank funding shock; bank credit; sector market share; sector specialization; firm risk (search for similar items in EconPapers)
JEL-codes: G01 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban
Date: 2018-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed

Downloads: (external link)
https://www.nbb.be/doc/oc/repec/reswpp/wp361en.pdf (application/pdf)

Related works:
Working Paper: Some borrowers are more equal than others: bank funding shocks and credit reallocation (2019) 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:nbb:reswpp:201810-361

Access Statistics for this paper

More papers in Working Paper Research from National Bank of Belgium Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-04-14
Handle: RePEc:nbb:reswpp:201810-361