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

53 Pages Posted: 8 Feb 2010

See all articles by Gabriel Jiménez

Gabriel Jiménez

Banco de España

Steven Ongena

University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR)

José-Luis Peydró

Imperial College London; Centre for Economic Policy Research (CEPR); Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Jesus Saurina Salas

Banco de España

Multiple version iconThere are 3 versions of this paper

Date Written: January 2010

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

JEL Classification: E32, E44, E5, G21, G28

Suggested Citation

Jimenez, Gabriel and Ongena, Steven R. G. and Peydro, Jose-Luis and Saurina Salas, Jesus, Credit Supply: Identifying Balance-Sheet Channels with Loan Applications and Granted Loans (January 2010). CEPR Discussion Paper No. DP7655, Available at SSRN: https://ssrn.com/abstract=1547575

Gabriel Jimenez (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Steven R. G. Ongena

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jose-Luis Peydro

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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/

Jesus Saurina Salas

Banco de España ( email )

Madrid 28014
Spain

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