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

63 Pages Posted: 15 Mar 2021

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School; European University Institute; Centre for Economic Policy Research (CEPR)

Jan Keil

Humboldt University of Berlin

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2021

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.

JEL Classification: G21

Suggested Citation

Beck, Thorsten and Keil, Jan, Are Banks Catching Corona? Effects of Covid on Lending in the U.S (March 1, 2021). CEPR Discussion Paper No. DP15869, Available at SSRN: https://ssrn.com/abstract=3805284

Thorsten Beck (Contact Author)

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

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

European University Institute

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jan Keil

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, AK Berlin 10099
Germany

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