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Macroprudential Policy And Corporate Loans

Author

Listed:
  • Christophe J. GODLEWSKI

    (LaRGE Research Center, Université de Strasbourg)

  • Malgorzata OLSZAK

    (Wydzial Zarzadzania, Uniwersytet Warszawski)

Abstract

We analyze the impact of macroprudential policies on corporate loans. We utilize a dataset of over 4,800 syndicated loans from 1999-2017, matched with detailed macroprudential policy data from the European Central Bank. We investigate how overall policy stance and specific tools influence key loan terms at origination, including the amount, maturity, collateral, and covenants. Drawing upon hypotheses related to credit growth, risk-taking, and efficiency transmission channels, we show that a tighter macroprudential policy leads to an increase in loan amounts and collateralization. These effects are most prominent for tools that tighten lending standards and capital buffers, particularly in domestic credit markets. Additionally, we provide insights into the influence of loan, borrower, and lender characteristics on the impact of macroprudential policy on loan terms. Our findings offer novel empirical evidence of macroprudential transmission occurring through risk-shifting and compensating behaviors in private debt markets.

Suggested Citation

  • Christophe J. GODLEWSKI & Malgorzata OLSZAK, 2024. "Macroprudential Policy And Corporate Loans," Working Papers of LaRGE Research Center 2024-01, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2024-01
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    More about this item

    Keywords

    macroprudential policy; bank loans; financial contracting; Europe;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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