Credit Supply: Identifying Balance-Sheet Channels with Loan Applications and Granted Loans
Abstract
| To identify credit availability we analyze the extensive and intensive margins of lending with loan applications and all loans granted in Spain. We find that both worse economic and tighter monetary conditions reduce loan granting, especially to firms or from banks with lower capital or liquidity ratios. Moreover, responding to applications for the same loan, weak banks are less likely to grant the loan. Our results suggest that firms cannot offset the resultant credit restriction by turning to other banks. Importantly the bank lending channel is notably stronger when we account for unobserved time varying firm heterogeneity in loan demand and quality. |
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Steven Ongena is a professor in empirical banking in the Department of Finance, the European Banking Center, and the Tilburg Law and Economics Center at CentER-Tilburg University. He is a research fellow in financial economics of CEPR. He has published in the Journal of Finance, the Journal of Financial Economics, the Journal of Financial Intermediation, Financial Management and the Review of Finance, among other journals. He co-authored, with Hans Degryse and Moshe Kim, the graduate textbook Microeconometrics of Banking: Methods, Applications and Results. He is a co-editor of the Review of Finance; and an associate editor of the Journal of Financial Intermediation, the European Economic Review, the International Review of Finance, the Journal of Financial Services Research and the Journal of Economic and Financial Sciences. He is a fellow of CFS, ECB (2009 Wim Duisenberg), FDIC-CFR (2008, 2004) and NAKE; a steering committee member of the ECB-CFS Research Network; and a board member of the European Banking Center. He contributed to reports or working papers issued by the Banco de Espana, BI, Board of Governors of the Federal Reserve System, AEI-Brookings Joint Center, CEPS-ECRI, CESifo, CFS, CentER, CEPR, CES, CSEF, Deutsche Bundesbank, EBC, ECGI, European Central Bank, Federal Deposit Insurance Corporation, Organisation for Economic Co-operation and Development, Oesterreichische Nationalbank, SITE, Swiss National Bank, TILEC, and Wharton Financial Institutions Center. This year he is teaching graduate courses at CentER, NAKE, the Barcelona Graduate School of Economics, and the Deutsche Bundesbank. In the past he has taught graduate courses at the Amsterdam Business School, the Barcelona Graduate School of Economics, BI - Norwegian School of Management, CentER, Frankfurt University, the Kiel Institute for the World Economy, NAKE, Norges Bank, and, the University of Mannheim. |
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