The Effects of Competition in Consumer Credit Markets

• 成果类型: Article
• 署名作者: Gissler, Stefan; Ramcharan, Rodney; Yu, Edison
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; University of Southern California; Federal Reserve System - USA; Federal Reserve Bank - Philadelphia
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa035
• 发表日期: 2020
• 页码: 5378
• 关键词: Banking; RISK; GROWTH

摘要

This paper finds that banks and nonbanks respond differently to increased competition in consumer credit markets. Increased competition and a greater threat of failure induces banks to specialize in relationship business lending, and surviving banks are more profitable. However, nonbanks change their credit policy when faced with more competition and expand credit to riskier borrowers at the extensive margin, resulting in higher default rates. These results showhowthe effects of competition depend on the form of intermediation. They also suggest that increased competition can cause credit risk to migrate outside the traditional supervisory umbrella.