Abstract

http://ssrn.com/abstract=1674828
 
 

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The Real Effects of the Bank Lending Channel


Gabriel Jiminez


Bank of Spain

Atif R. Mian


Princeton University - Department of Economics; Princeton University - Woodrow Wilson School of Public and International Affairs; NBER

Jose-Luis Peydro


Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Barcelona Graduate School of Economics (Barcelona GSE); Universitat Pompeu Fabra - Centre de Recerca en Economia Internacional (CREI); Centre for Economic Policy Research (CEPR)

Jesus Saurina Salas


Bank of Spain

November 1, 2014


Abstract:     
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.

Number of Pages in PDF File: 51

Keywords: lending channel, securitization, banking crises, Spain

JEL Classification: G21, G01, G17

working papers series





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Date posted: September 11, 2010 ; Last revised: November 20, 2014

Suggested Citation

Jiminez, Gabriel and Mian, Atif R. and Peydro , Jose-Luis and Saurina Salas, Jesus, The Real Effects of the Bank Lending Channel (November 1, 2014). Available at SSRN: http://ssrn.com/abstract=1674828 or http://dx.doi.org/10.2139/ssrn.1674828

Contact Information

Gabriel Jiminez
Bank of Spain ( email )
Alcala 50
Madrid 28014
Spain
Atif R. Mian (Contact Author)
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States
Princeton University - Woodrow Wilson School of Public and International Affairs ( email )
Princeton University
Princeton, NJ 08544-1021
United States
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jose-Luis Peydro
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, Barcelona 08005
Spain
(+34) 93 542 1756 (Phone)
(+34) 93 542 1746 (Fax)
HOME PAGE: http://https://sites.google.com/site/joseluispeydroswebpage/
Barcelona Graduate School of Economics (Barcelona GSE) ( email )
Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain
HOME PAGE: http://www.barcelonagse.eu/Faculty.php?id=432
Universitat Pompeu Fabra - Centre de Recerca en Economia Internacional (CREI) ( email )
Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Jesus Saurina Salas
Bank of Spain ( email )
Madrid 28014
Spain
Feedback to SSRN


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References:  72
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