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Non-bank lending during crises

Author

Listed:
  • Iñaki Aldasoro
  • Sebastian Doerr
  • Haonan Zhou

Abstract

This paper shows that non-banks curtail their syndicated credit by significantly more than banks during crises, even after accounting for time-varying lender and borrower characteristics. We provide novel evidence that differences in the value of lending relationships explain most of the gap: unlike for banks, relationships with non-banks – whether measured by duration or intensity – do not improve borrowers' access to credit during crises. The rise of non-banks could therefore lead to a shift from relationship towards transaction lending and exacerbate the repercussions of financial crises.

Suggested Citation

  • Iñaki Aldasoro & Sebastian Doerr & Haonan Zhou, 2023. "Non-bank lending during crises," BIS Working Papers 1074, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1074
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    References listed on IDEAS

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    1. McCann, Fergal & McGeever, Niall & Peia, Oana, 2023. "Do non-bank lenders mitigate credit supply shocks? Evidence from a major bank exit," Research Technical Papers 9/RT/23, Central Bank of Ireland.

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    More about this item

    Keywords

    Non-banks; syndicated loans; financial crises; financial stability; relationship lending;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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