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Do Banks Lend Less in Uncertain Times?

Burkhard Raunig, Johann Scharler and Friedrich Sindermann ()

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: We study the development of bank lending in the U.S. after four large jumps in uncertainty using an event study approach. We find that more liquid banks reduce lending less than banks with smaller liquidity ratios after a surge in uncertainty. Lending by smaller banks is also less responsive to increases in uncertainty. Banks with a higher capitalization ratio keep up lending to a greater extent, but the effect is only significant for banks which are not part of a multi-bank holding company. This heterogeneity across banks suggests that declines in bank lending following increases in uncertainty are partly the result of a reduced supply of bank loans.

Keywords: uncertainty; bank loan supply; event study (search for similar items in EconPapers)
JEL-codes: E20 E30 E44 (search for similar items in EconPapers)
Pages: 45
Date: 2014-06-26
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Related works:
Journal Article: Do Banks Lend Less in Uncertain Times? (2017) Downloads
Working Paper: Do Banks Lend Less in Uncertain Times? (2014) Downloads
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