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Shock absorbers and transmitters: the dual facets of bank specialization

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dc.contributor.author Iyer, Rajkamal
dc.contributor.author Michaelides, Alexander
dc.contributor.author Kokas, Sotirios
dc.contributor.author Peydró, José-Luis
dc.date.accessioned 2023-04-28T12:32:11Z
dc.date.available 2023-04-28T12:32:11Z
dc.date.issued 2022-11-25
dc.identifier.uri http://hdl.handle.net/10230/56620
dc.description.abstract This paper highlights the dual facets of bank specialization. After negative industry-specific shocks, banks specializing in an affected sector act as shock absorbers by increasing their lending to firms in that sector at lower interest rates than non-specialized banks. This lending is to profitable firms, thus not consistent with zombie lending. However, when there are funding constraints, increased lending to the affected sector by specialized banks is accompanied by a simultaneous cut in lending to unrelated sectors, thereby transmitting the shock. These firms compensate by raising funds externally. However, in tight financing conditions, there are negative real effects.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.title Shock absorbers and transmitters: the dual facets of bank specialization
dc.type info:eu-repo/semantics/workingPaper
dc.subject.keyword Bank specialization
dc.subject.keyword Industry-specific shocks
dc.subject.keyword Real effects
dc.subject.keyword Credit growth
dc.subject.keyword Financial frictions
dc.rights.accessRights info:eu-repo/semantics/openAccess


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