Granular Borrowers

54 Pages Posted: 7 Jun 2019

See all articles by Paul Beaumont

Paul Beaumont

Paris Dauphine University

Thibault Libert

Banque de France

Christophe Hurlin

University of Orleans

Date Written: May 21, 2019


This paper uses a credit registry covering the quasi universe of firm-bank relationships in France for the period 1999-2016 to provide a detailed account of the role of very large borrowers ("granular borrowers") in shaping bank-level and aggregate credit variations. We document that the distribution of borrowers is fat-tailed, the top 100 borrowers making up on average for 18% of the aggregate amount of long-term credit and 64% of total undrawn credit lines. We adapt the methodology of Amiti and Weinstein (2018) to identify the contributions of firm, bank, and aggregate shocks to credit variations at any level of aggregation. At the macroeconomic level, we show that the aggregate properties of credit largely reflect the idiosyncratic shocks of granular borrowers. This finding highlights the limitations of using time series of aggregate credit to assess the magnitude of financial frictions in the economy. At the bank-level, we find that the concentration of the portfolio of credit lines exposes lenders to considerable borrower idiosyncratic risk and leads liquidity flows to be more synchronized across banks. This suggests that shocks on granular borrowers may represent a source of systemic risk.

Keywords: granularity, bank concentration, cyclicality of credit, liquidity risk

JEL Classification: E32, E51, G21

Suggested Citation

Beaumont, Paul and Libert, Thibault and Hurlin, Christophe, Granular Borrowers (May 21, 2019). Université Paris-Dauphine Research Paper No. 3391768, Available at SSRN: or

Paul Beaumont (Contact Author)

Paris Dauphine University ( email )

Place du Maréchal de Tassigny

Thibault Libert

Banque de France ( email )

Christophe Hurlin

University of Orleans ( email )

Université d'Orléans
Rue de Blois B.P. 6739 45

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