Credit Supply: Identifying Balance-Sheet Channels with Loan Applications and Granted Loans

By Gabriel Jiménez, Steven R. G. Ongena, José-Luis Peydró, Jesús Saurina Salas. Social Science Research Network, 2010

123 citations recorded by the source corpus.

To identify credit availability we analyze the extensive and intensive margins of lending with loan applications and all loans granted in Spain. We find that during the period analyzed both worse economic and tighter monetary conditions reduce loan granting, especially to firms or from banks with lower capital or liquidity ratios. Moreover, responding to applications for the same loan, weak banks are less likely to grant the loan. Our results suggest that firms cannot offset the resultant credit restriction by turning to other banks. Importantly the bank-lending channel is notably stronger when we account for unobserved time-varying firm heterogeneity in loan demand and quality.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/51a9abe73cb73d62da35d811b03097650b84d697

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Rochelle M. Edge
2. J. Berrospide
3. Ralf R. Meisenzahl
4. T. Cosimano
5. Dalia S. Hakura

In Economics and Econometrics

1. J. Berrospide
2. Rochelle M. Edge

In Finance

1. Rochelle M. Edge
2. J. Berrospide
3. Dalia S. Hakura
4. Ralf R. Meisenzahl
5. T. Cosimano

Citations in the corpus

• The Effects of Bank Capital on Lending: What Do We Know, and What Does It Mean? (2012, methodology): “We next performed rolling-window panel regressions over the sample period to address the possibility that the effect of shocks to bank capital on loan growth has been declining.(23) We used fixed-size rolling windows of six, seven, and eight years and quarterly data starting in 1992:Q1.”
• Balance Sheet Strength and Bank Lending During the Global Financial Crisis (2013, unknown): “In that case, the results for these banks (columns 9–10) would capture both the effect of reliance on non-deposit funding and that of US dollars shortages (Kapan and Minoiu, 2012). However, earlier results alleviate this concern. Cornett, McNutt, Strahan and Tehranian (2011) and Ivashina and Scharfs”
• The Impact of Capital Requirements on Bank Lending (2014, methodology): “Jimenez et al (2010) exploit a matched panel for Spain and find that lending varies with the capital and liquidity positions of both banks and borrowers as well as with macroeconomic conditions.”
• Credit Supply During a Sovereign Debt Crisis (2018, unknown): “The inclusion of rm-period xed e¤ects in all regressions, similarly to what Khwaja and Mian (2008) or Jimenez et al. (2012) do, enables us to control for all rm-level unobserved heterogeneity that a¤ects the dynamics of credit granted and of its cost in each period.”