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

Steven Ongena, Peydró, José-Luis, Jiménez, Gabriel and Jesús Saurina ()
Authors registered in the RePEc Author Service: Jose-Luis Peydro and Gabriel Jimenez

No 7655, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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 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.

Keywords: Credit supply; Financial accelerator; Firm borrowing capacity; Non-financial and financial borrower balance-sheet channels (search for similar items in EconPapers)
JEL-codes: E32 E44 E5 G21 G28 (search for similar items in EconPapers)
Date: 2010-01
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Citations: View citations in EconPapers (30)

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Working Paper: Credit supply: identifying balance-sheet channels with loan applications and granted loans (2010)
Working Paper: Credit supply - Identifying balance-sheet channels with loan applications and granted loans (2010)
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