The Credit Concentration Channel of Monetary Policy Transmission During a Crisis

64 Pages Posted: 12 Dec 2015 Last revised: 5 Sep 2019

See all articles by Adonis Antoniades

Adonis Antoniades

National University of Singapore (NUS) - Department of Finance

Date Written: September 5, 2019

Abstract

I use loan-level data on mortgage applications and the monetary easing of 2008 in the United States to identify the effect of credit concentration on the subsequent recovery of lending. In response to monetary easing, lenders expanded their credit supply but less so in more concentrated counties. Within counties, the pass-through was lower for lenders with higher local market power. The credit concentration channel is symmetrically active during the 2005 monetary tightening episode. It is distinct from the deposits channel of monetary policy transmission, and its influence is ubiquitous: it affects both new loans and refinances, operates through both depository and non-depository institutions, and impacts lender supply across the spectrum of market positions.

Keywords: mortgage credit, lending channel, monetary policy, market concentration, market power

JEL Classification: G01, G21, G23, E51, E52, E58

Suggested Citation

Antoniades, Adonis, The Credit Concentration Channel of Monetary Policy Transmission During a Crisis (September 5, 2019). Available at SSRN: https://ssrn.com/abstract=2702374 or http://dx.doi.org/10.2139/ssrn.2702374

Adonis Antoniades (Contact Author)

National University of Singapore (NUS) - Department of Finance ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

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