Iyer, RajkamalLopes, SamuelPeydró, José-LuisSchoar, Antoinette2019-01-092019-01-092014Iyer R, Lopes S, Peydró JL, Schoar A. Interbank liquidity crunch and the firm credit crunch: evidence from the 2007-2009 crisis. Rev Financ Stud. 2014 Jan 1;27(1):347-72. DOI: 10.1093/rfs/hht0560893-9454http://hdl.handle.net/10230/36226We study the credit supply effects of the unexpected freeze of the European interbank market, using exhaustive Portuguese loan-level data. We find that banks that rely more on interbank borrowing before the crisis decrease their credit supply more during the crisis. The credit supply reduction is stronger for firms that are smaller, with weaker banking relationships. Small firms cannot compensate the credit crunch with other sources of debt. Furthermore, the impact of illiquidity on the credit crunch is stronger for less solvent banks. Finally, there are no overall positive effects of central bank liquidity, but higher hoarding of liquidity.application/pdfeng© Oxford University Press. This is a pre-copyedited, author-produced version of an article accepted for publication in The Review of Financial Studies following peer review. The version of record Iyer R, Lopes S, Peydró JL, Schoar A. Interbank liquidity crunch and the firm credit crunch: evidence from the 2007-2009 crisis. Rev Financ Stud. 2014 Jan 1;27(1):347-72 is available online at: http://dx.doi.org/10.1093/rfs/hht056info:eu-repo/semantics/articlehttp://dx.doi.org/10.1093/rfs/hht056Credit crunchBanking crisisInterbank marketsAccess to creditFlight to qualityLender of last resortLiquidity hoardinginfo:eu-repo/semantics/openAccess