Bank Supervision and Corporate Credit Supply

• 成果类型: Article
• 署名作者: Ivanov, Ivan T.; Wang, James Z.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4854
• 发表日期: 2024
• 关键词: Bank supervision; corporate credit supply; the syndicated loan market; Shadow banks

摘要

We exploit the quasi-random assignment of federal bank examiners to syndicated loans to study the effect of supervision on corporate lending. Following supervisory rating downgrades, banks decrease credit commitments and downgrade internal risk assessments. Borrowers face larger commitment reductions whenever banks have low ex ante screening and monitoring incentives or whenever examiners' assessments contain more information than banks' assessments, suggesting that examinations complement bank monitoring. Although public firms can offset the loss of bank credit by tapping external capital markets, smaller and more opaque private firms draw on internal cash balances instead and reduce investment and sales growth.