Aggregate Implications of Credit Relationship Flows: A Tale of Two Margins

88 Pages Posted: 27 Mar 2020 Last revised: 26 Apr 2021

See all articles by Yasser Boualam

Yasser Boualam

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Clément Mazet-Sonilhac

Banque de France

Multiple version iconThere are 2 versions of this paper

Date Written: March 3, 2020

Abstract

This paper studies the aggregate properties of credit relationship flows within the commercial loan market in France from 1998 through 2017. Using detailed bank-firm level data, we derive a novel decomposition for credit dynamics and show that banks actively adjust their lending along both extensive and intensive margins. We document that gross credit relationship flows (i) are volatile and pervasive throughout the cycle, and (ii) account for up to 46% of the cyclical and 90% of the long-run aggregate bank credit variations. We also highlight the distinctive features associated with the extensive margin channel of monetary policy.

Keywords: Credit Flows; Financial Institutions; Monetary Policy Transmission; Relationship Lending; Search and Matching

JEL Classification: E50, G20

Suggested Citation

Boualam, Yasser and Mazet-Sonilhac, Clément, Aggregate Implications of Credit Relationship Flows: A Tale of Two Margins (March 3, 2020). Available at SSRN: https://ssrn.com/abstract=3548327 or http://dx.doi.org/10.2139/ssrn.3548327

Yasser Boualam (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

HOME PAGE: http://www.yasserboualam.com

Clément Mazet-Sonilhac

Banque de France ( email )

Paris
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
73
Abstract Views
967
rank
369,710
PlumX Metrics