The Effects of Government Capital and Liquidity Support Programs on Bank Lending: Evidence from the Syndicated Corporate Credit Market

Abstract This paper analyzes the dynamic response of loans to the private sector and of economic activity to aggregate supply, demand and monetary policy shocks in Germany and the euro area based on a standard macroeconomic VAR using sign restrictions to identify the structural shocks. The main results of this analysis are that (i) with the exception of the response to the supply shock in Germany, the response of loans to the three macroeconomic shocks is rather weak and in most cases insignificant; (ii) the 2000-05 credit slowdown and weak economic performance in Germany were primarily driven by adverse supply shocks; and (iii) the marked slowdown in credit creation in Germany over this period actually represents a realignment of the outstanding stock of loans with its deterministic level. In order to assess the role of bank lending in the transmission of macroeconomic shocks, we further perform counterfactual simulations and analyze the dynamic responses of German loan subaggregates in order to test the distributional implications of potential credit market frictions. These exercises do not indicate that credit market frictions play an amplifying role in the transmission of macroeconomic fluctuations.

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Trends in consumer lending development

Regional Economics Theory and Practice ◽

10.24891/re.18.8.1449 ◽

2020 ◽

Vol 8 (8) ◽

pp. 1449-1458

Author(s):

P.G. Isaevа ◽

P.M. Shabanovа

Keyword(s):

Empirical Analysis ◽

Consumer Credit ◽

Credit Market ◽

Bank Lending ◽

Consumer Lending ◽

Development Methods

Subject. This article discusses theoretical and practical approaches to the issue of consumer lending to the population. Objectives. The article aims to consider the problems and prospects of consumer lending development. Methods. For the study, we used an empirical analysis. Results. Based on the analysis of the Russian consumer credit market, the article outlines ways to develop bank lending to individuals. Relevance. The results of the study can be used to further explore the problems of consumer lending.

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Measuring bank efficiency and market power in the household and corporate credit markets considering credit risks

Acta Oeconomica ◽

10.1556/032.2018.68.2.1 ◽

2018 ◽

Vol 68 (2) ◽

pp. 175-207 ◽

Cited By ~ 1

Author(s):

Zsuzsanna Hosszú ◽

Bálint Dancsik

Keyword(s):

Market Power ◽

Cost Efficiency ◽

Stochastic Frontier Analysis ◽

Credit Markets ◽

Credit Market ◽

Operating Conditions ◽

Gradual Improvement ◽

Frontier Analysis ◽

Corporate Credit ◽

Lerner Index

The aim of this paper is to estimate the efficiency of Hungarian banks with several models and to calculate the Lerner index for both the household and the corporate credit market. We apply stochastic frontier analysis (SFA) and data envelopment analysis (DEA) models to estimate the efficiency and calculate profit and cost efficiency with and without taking credit losses into consideration. In terms of cost efficiency, banks are nearly homogeneous and improved their efficiency after the crisis. Banks, however, are extremely heterogeneous in terms of profit efficiency. During the crisis, a gradual improvement could be observed across the sector after the initial downturn. Since the operating conditions of the household and the corporate credit markets are different, we estimated the intensity of competition separately for both the markets. While the Lerner index showed strong market power in the household credit market, the corporate credit market was characterised by intense competition. Regarding efficiency, various models often resulted in different conclusions, especially in the case of cost efficiency. Therefore we recommend that the regulatory decision-making process should always consider the results of several models. Moreover, the Lerner indices demonstrate that it might be important to use disaggregated models when modelling the features of credit markets.

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Delayed Credit Recovery in Croatia: Supply or Demand Driven?

Journal of Central Banking Theory and Practice ◽

10.2478/jcbtp-2018-0006 ◽

2018 ◽

Vol 7 (1) ◽

pp. 121-144 ◽

Cited By ~ 1

Author(s):

Mirna Dumičić ◽

Igor Ljubaj

Keyword(s):

Supply And Demand ◽

Bank Lending ◽

Credit Recovery ◽

Switching Regression ◽

Credit Supply ◽

Corporate Credit ◽

Regression Framework ◽

Credit Cycle ◽

Credit Demand ◽

Macroeconomic Environment

AbstractIn order to enhance the understanding of credit cycle dynamics in Croatia, we explore the evolution of credit demand and credit supply of corporates and households in Croatia and identify their determinants based on the switching regression framework. These results are crosschecked by the insights from the bank lending survey. The conducted analysis shows there are both supply and demand-side factors that limit the possibility of intensifying household and corporate credit activity. However, a more pronounced drag seems to be coming from subdued demand, which is greatly influenced by the unfavourable domestic macroeconomic environment and, particularly, GDP developments. This suggests that it is not unusual that credit recovery is still missing but also confirms that the scope for monetary policy to stimulate lending is limited.

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