TY - JOUR
T1 - The real effects of the bank lending channel
AU - Jiménez, Gabriel
AU - Mian, Atif
AU - Peydró, José Luis
AU - Saurina, Jesús
N1 - Funding Information:
We thank several anonymous referees and Ricardo Reis for very helpful comments and suggestions. We also thank Michael Weber for excellent research assistance. We also thank seminar participants at Universitat Pompeu Fabra, University of Chicago, European Central Bank, MIT (applied), New York Federal Reserve, University of Michigan (Ross), Notre Dame, and University of California Berkeley and also Joshua Angrist, Xavier Freixas, Asim Khwaja, Daniel Paravisini, Amir Sufi and Jaume Ventura for helpful comments. José-Luis Peydró acknowledges financial support from project ECO2015-68182-P (MINECO/FEDER, UE) and the European Research Council Grant (project 648398). The results or views expressed in this study are those of the authors and do not necessarily reflect those of the Banco de España or the Eurosystem.
Publisher Copyright:
© 2020 The Authors
PY - 2020/11
Y1 - 2020/11
N2 - This paper studies credit booms exploiting the Spanish matched credit register over 2001–2009. We extend Khwaja and Mian's (2008) 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.
AB - This paper studies credit booms exploiting the Spanish matched credit register over 2001–2009. We extend Khwaja and Mian's (2008) 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.
KW - Bank lending channel
KW - Credit supply booms
KW - Real effects of credit
KW - Real estate
KW - Securitization
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U2 - 10.1016/j.jmoneco.2019.06.002
DO - 10.1016/j.jmoneco.2019.06.002
M3 - Article
AN - SCOPUS:85072397316
SN - 0304-3932
VL - 115
SP - 162
EP - 179
JO - Carnegie-Rochester Confer. Series on Public Policy
JF - Carnegie-Rochester Confer. Series on Public Policy
ER -