Discussion Paper Details

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Title: Loan Types and the Bank Lending Channel

Author(s): Victoria Ivashina, Luc Laeven and Enrique Moral-Benito

Publication Date: March 2020

Keyword(s): Bank credit, bank lending channel, Credit registry and Loan types

Programme Area(s): Financial Economics

Abstract: Using credit-registry data for Spain and Peru, we document that four main types of commercial credit-asset-based loans, cash flow loans, trade finance and leasing-are easily identifiable and represent the bulk of corporate credit. We show that credit growth dynamics and bank lending channels vary across these loan types. Moreover, aggregate credit supply shocks previously identified in the literature appear to be driven by individual loan types. The effects of monetary policy and the effects of the financial crisis propagating through banks' balance sheets are primarily driven by cash flow loans, whereas asset-based credit appears to be largely insensitive to these types of effects.

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Bibliographic Reference

Ivashina, V, Laeven, L and Moral-Benito, E. 2020. 'Loan Types and the Bank Lending Channel'. London, Centre for Economic Policy Research.