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Public-guaranteed loans and bank risk-taking
[Prêts garantis par l’État et prise de risque bancaire]

Author

Listed:
  • Théo Nicolas
  • Stefano Ungaro
  • Eric Vansteenberghe

Abstract

Despite the fears that were expressed when they were launched, public-guaranteed loans (PGLs) did not prompt banks to increase their risk-taking. By mechanically reducing the weighting of risks, the partial public guarantee made it possible to continue financing businesses while maintaining their standards for screening new loans. Contrairement aux craintes qui ont émergé lors de leur lancement, les prêts garantis par l’État (PGE) n’ont pas incité les banques à accroître leur prise de risque. En réduisant mécaniquement la pondération des risques, la garantie d’État partielle a permis de continuer à financer les entreprises tout en maintenant la sélectivité du crédit.

Suggested Citation

  • Théo Nicolas & Stefano Ungaro & Eric Vansteenberghe, . "Public-guaranteed loans and bank risk-taking [Prêts garantis par l’État et prise de risque bancaire]," Eco Notepad (in progress), Banque de France.
    • Handle: RePEc:bfr:econot:353
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    File URL: https://www.banque-france.fr/en/publications-and-statistics/publications/public-guaranteed-loans-and-bank-risk-taking
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    File URL: https://www.banque-france.fr/fr/publications-et-statistiques/publications/prets-garantis-par-letat-et-prise-de-risque-bancaire
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