The real effects of the bank lending channel

Gabriel Jimenez, Atif Mian, Jose-Luis Peydro and Jesús Saurina ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We study bank credit booms, exploiting the Spanish matched credit register over 2001-2009. We extend Khwaja and Mian (2008)’s loan-level estimator by incorporating firm-level general equilibrium adjustments. Higher ex-ante bank real-estate exposure increases credit supply to non-real-estate firms, but effects are neutralized by firm-level adjustments for firms with existing banking relationships. However, higher bank real-estate exposure increases risk-taking, by relaxing standards of existing borrowers (cheaper, longer-term and less collateralized credit), and by expanding credit on the extensive margin to first-time borrowers that default substantially more. Results suggest that the mechanism at work is greater liquidity via securitization of real-estate assets.

Keywords: Bank lending channel; real effects of credit; credit supply booms; real estate; securitization. (search for similar items in EconPapers)
JEL-codes: E32 E44 G01 G21 G28 (search for similar items in EconPapers)
Date: 2014-11, Revised 2019-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

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Related works:
Journal Article: The real effects of the bank lending channel (2020)
Journal Article: The Real Effects of the Bank Lending Channel (2020)
Working Paper: The Real Effects of the Bank Lending Channel (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1653

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