Are Banks Catching Corona? Effects of COVID on Lending in the U.S.

60 Pages Posted: 17 Jan 2021 Last revised: 24 Feb 2021

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School

Jan Keil

Humboldt University of Berlin

Date Written: September 24, 2020

Abstract

Exploiting geographic variation in the exposure of U.S. banks to COVID-19 and lockdown policies we find that banks more exposed to pandemic and lockdown policies show an increase in loss provisions and non-performing loans. While we observe an increase in corporate, especially small business, lending growth, this is driven by government-guaranteed loans. Finally, we observe a reduction in the number and average amount of syndicated loans for banks more affected by the pandemic as well as an increase in interest spreads and decrease in maturities. These findings point to a negative impact of the pandemic and swift reactions by banks.

Keywords: COVID-19, banking

JEL Classification: G21

Suggested Citation

Beck, Thorsten and Keil, Jan, Are Banks Catching Corona? Effects of COVID on Lending in the U.S. (September 24, 2020). Available at SSRN: https://ssrn.com/abstract=3766831 or http://dx.doi.org/10.2139/ssrn.3766831

Thorsten Beck

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Jan Keil (Contact Author)

Humboldt University of Berlin ( email )

Dorotheenstrasse 1
Berlin, 10099
Germany

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

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