The real effects of the bank lending channel
By Gabriel Jiménez, Atif R. Mian, José-Luis Peydró, Jesús Saurina. Journal of Monetary Economics, 2019
132 citations recorded by the source corpus.
For policy and academia it is crucial to quantify the real effects of the bank lending channel. We analyze the impact of securitization of real estate assets on the supply of credit to non real-estate firms, including risk-taking, and the associated real effects. For identification, we use the credit register of Spain, matched with firm- and bank-level balance-sheet data, and generalize the Khwaja and Mian (2008)’s loan-level estimator to firm-level in order to identify the real aggregate effects of the bank lending channel. The robust results suggest a strong impact on credit supply to non real-estate firms of banks’ ability to securitize real-estate assets. However, this strong loan-level credit channel is neutralized by firm-level equilibrium dynamics in good times. In consequence, we find no real and credit effects at the firm-level. Importantly, securitization implies higher bank risk-taking, both by relaxing lending standards of existing borrowers – cheaper and less collateralized credit with longer maturity – and by a credit expansion on the extensive margin to first-time bank borrowers that substantially default more.
Subfields: Accounting, Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/a2c081b24eac41e9672125f2b4c03601e7462799
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Citations in the corpus
- On the direct and indirect real effects of credit supply shocks (2019, unknown): “, liquidity in Khwaja and Mian (2008) or Huber (Forthcoming), securitization in Jimenez, Mian, Peydro, and Saurina (2014), and higher capital requirements in Blattner, Farihan, and Rebelo (2017)), we estimate time-variant bank credit shocks and study their real effects on employment, output, and inv”
- The Credit Line Channel (2020, unknown): “…others, examples are Ashcraft (2005), Gan (2007), Paravisini (2008), Schnabl (2012), Jiménez et al. (2012, 2014), Iyer et al. (2014), Huber (2018), Jiménez et al. (2020), Paravisini, Rappoport and Schnabl (2020), Blattner, Farinha and Rebelo (2020), and Martín, Moral-Benito and Schmitz (2020).”
- Are Credit Markets Still Local? Evidence from Bank Branch Closings (2019, background): “…exploiting either variation in the bank-level incidence of aggregate shocks (Peek and Rosengren 2000; Khwaja and Mian 2008; Chodorow-Reich 2014; Jiménez et al. 2014; Greenstone, Mas, and Nguyen 2017) or idiosyncratic, bank-level failures (Ashcraft 2005), I use detailed microdata to tie these…”