The Extension of Credit with Nonexclusive Contracts and Sequential Banking Externalitiest

• 成果类型: Article
• 署名作者: De Giorgi, Giacomo; Drenik, Andres; Seira, Enrique
• 署名单位: University of Geneva; University of Texas System; University of Texas Austin
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20200220
• 发表日期: 2023
• 页码: 233-271
• 关键词: regression discontinuity designs; information asymmetries; liquidity constraints; consumer-behavior; COMPETITION; matter

摘要

Nonexclusive sequential borrowing can increase default and impose externalities on prior lenders. We document that sequential banking is pervasive with substantial effects. Using credit card applications from a large bank and data on the applicants' entire loan portfo-lios, we find that an additional credit line causes a 5.9 percentage point decline in default for high-score borrowers on previous loans. However, for low-score borrowers, it causes a 19 percentage point increase. The former use the new credit to smooth payments on pre-existing loans, while the latter increase their total debt. These results have implications for no-universal-default regulation and finan-cial inclusion. (JEL D62, D82, G21, G51)