Institutional investors, the dollar, and US credit conditions

• 成果类型: Article
• 署名作者: Niepmann, Friederike; Schmidt-Eisenlohr, Tim
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.08.003
• 发表日期: 2023
• 页码: 198-220
• 关键词: Leveraged loan market; Commercial and industrial loans; U; S; dollar exchange rate; Credit standards; institutional investors

摘要

A strong dollar has been associated with lower lending to emerging markets and tighter global financial conditions. This paper documents similar patterns for credit in the U.S. economy: when the U.S. broad dollar index appreciates by 1 percent, U.S. banks' corporate loan originations fall by 4.5 percent, with banks tightening credit standards and lending to safer borrowers. This negative correlation, which we term the U.S. dollar credit channel, is at least in part driven by institutional investors, who reduce their demand for risky loans on the secondary loan market when the dollar appreciates. As it becomes harder to sell loans to these investors, banks lend less.