Loan Types and the Bank Lending Channel
44 Pages Posted: 19 Mar 2020 Last revised: 17 Apr 2020
Date Written: February 17, 2020
Using credit-registry data for Spain and Peru, we document that four main types of commercial credit — asset-based loans, cash flow loans, trade finance and leasing — are easily identifiable and represent the bulk of corporate credit. We show that credit growth dynamics and bank lending channels vary across these loan types. Moreover, aggregate credit supply shocks previously identified in the literature appear to be driven by individual loan types. The effects of monetary policy and the effects of the financial crisis propagating through banks’ balance sheets are primarily driven by cash flow loans, whereas asset-based credit appears to be largely insensitive to these types of effects.
Keywords: Bank credit, Loan types, Bank lending channel, Credit registry
JEL Classification: E5, G21
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