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    Bank lending in uncertain times

    Alessandri, P. and Bottero, M. (2017) Bank lending in uncertain times. Working Paper. Birkbeck, University of London, London, UK.

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    Abstract

    We study the impact of economic uncertainty on the supply of bank credit using a monthly dataset that includes all loan applications submitted by a sample of 650,000 Italian firms between 2003 and 2012. We find that an increase in aggregate uncertainty has three effects. First, it reduces banks' likelihood to accept new credit applications. Second, it lengthens the time firms have to wait for their loans to be released. Third, it makes banks less responsive to fluctuations in short-term interest rates, weakening the bank lending channel of monetary policy. The influence of uncertainty is relatively stronger for poorly capitalized lenders and geographically distant borrowers.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BCAM 1703; ISSN 1745-8587
    Keyword(s) / Subject(s): uncertainty, credit supply, bank lending channel, loan applications
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Research Centre: Applied Macroeconomics, Birkbeck Centre for
    Depositing User: Administrator
    Date Deposited: 21 Mar 2019 16:21
    Last Modified: 27 Jul 2019 04:24
    URI: http://eprints.bbk.ac.uk/id/eprint/26669

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