Fintech vs Bank Credit: How Do They React to Monetary Policy?

13 Pages Posted: 5 Sep 2023

See all articles by Giulio Cornelli

Giulio Cornelli

Bank for International Settlements (BIS)

Fiorella De Fiore

Bank for International Settlements (BIS) - Monetary and Economic Department

Leonardo Gambacorta

Bank for International Settlements (BIS); Centre for Economic Policy Research (CEPR)

Cristina Manea

affiliation not provided to SSRN

Abstract

Fintech credit, which includes peer-to-peer and marketplace lending as well as lending facilitated by major technology firms, is witnessing rapid growth worldwide. However, its responsiveness to monetary policy shifts remains largely unexplored. This study employs a novel credit dataset spanning 19 countries from 2005 to 2020 and conducts a PVAR analysis to shed some light on the different reaction of fintech and bank credit to changes in policy rates. The main result is that fintech credit shows a lower (even non-significant) reactivity to monetary policy shocks in comparison to traditional bank credit. Given the still marginal – although fast growing – macroeconomic significance of fintech credit, its contribution in explaining the variability of real GDP is less than 2%, against around one quarter for bank credit.

Keywords: fintech credit, monetary policy, PVAR, collateral channel

Suggested Citation

Cornelli, Giulio and De Fiore, Fiorella and Gambacorta, Leonardo and Manea, Cristina, Fintech vs Bank Credit: How Do They React to Monetary Policy?. Available at SSRN: https://ssrn.com/abstract=4561961 or http://dx.doi.org/10.2139/ssrn.4561961

Giulio Cornelli (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Fiorella De Fiore

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Leonardo Gambacorta

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Cristina Manea

affiliation not provided to SSRN ( email )

No Address Available

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

Paper statistics

Downloads
54
Abstract Views
201
Rank
736,169
PlumX Metrics