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Dampening the financial accelerator? direct lenders and monetary policy

Author

Listed:
  • Ryan Banerjee

    (Bank for International Settlement)

  • José-María Serena

    (Banco de España)

Abstract

Direct lenders, non-bank credit intermediaries with low leverage, have become increas-ingly important players in corporate loan markets. In this paper we investigate the role they play in the monetary policy transmission mechanism, using syndicated loan data covering the 2000-2018 period. We show that direct lenders are more likely to join loan syndicates whenever monetary policy announcements trigger a contraction in borrowers’ net worth irrespective of the directional change in interest rates. Thus, our findings suggest that direct lenders dampen the financial accelerator channel of monetary policy.

Suggested Citation

  • Ryan Banerjee & José-María Serena, 2021. "Dampening the financial accelerator? direct lenders and monetary policy," Working Papers 2201, Banco de España.
    • Handle: RePEc:bde:wpaper:2201
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    References listed on IDEAS

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    Cited by:

    1. Iñaki Aldasoro & Sebastian Doerr & Haonan Zhou, 2023. "Non-bank lending during crises," BIS Working Papers 1074, Bank for International Settlements.

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    More about this item

    Keywords

    direct lending; monetary policy; financial accelerator; credit channel;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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