The importance of technology in banking during a crisis
Yannick Timmer and
No 117, ESRB Working Paper Series from European Systemic Risk Board
We study the implications of information technology (IT) in banking for financial stability, using data on US banks’ IT equipment and the tech-background of their executives. We find that one standard deviation higher pre-crisis IT adoption led to 10% fewer non-performing loans during the global financial crisis. We present several pieces of evidence that indicate a direct role of IT adoption in strengthening bank resilience; these include instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis reveals that high-IT adoption banks originated mortgages with better performance and did not offload low-quality loans. JEL Classification: O3, G21, G14, E44, D82, D83
Keywords: financial stability; it adoption; non-performing loans; technology (search for similar items in EconPapers)
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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 (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:srk:srkwps:2021117
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