Are bank loans important for output growth?

Two-way interplays between capital buffers and credit growth: Evidence from French banks

“…On the one hand, Sharpe (1995) and Jackson et al (1999) conclude that negative shocks to capital lead low-capitalized banks to cut back on new lending during recessions, their results being confirmed by more recent papers such as Gambacorta and Mistrulli (2004), Nier and Zicchino (2005), Francis and Osborne (2009), Berrospide and Edge (2010). Moreover, this effect is reinforced by new evidence showing that credit is a key determinant for output growth in European countries (Rondorf, 2012). On the other hand, Berger and Udell (1994) find that the decline in loan growth was actually larger for well-capitalized banks in the particular case of commercial real estate lending and two other credit sub-categories in the US.…”

Financial development and the bank lending channel in developing countries

“…Besides, a monetary policy contraction also increases the difficulty and cost of attracting deposits and market-based funding (Bernanke, 2007;Disyatat, 2011). 3 See, among others, Kashyap and Stein (1995), Chiades and Gambacorta (2004), Brissimis and Magginas (2005), Iacoviello and Minetti (2008), Altunbas et al (2010), Cappiello et al (2010), Gambacorta et al (2011), Rondorf (2012), Ciccarelli et al (2013), Milcheva (2013), and Cantero-Sainz (2014). 4 See, among others, Kashyap and Stein (1995) Altunbas et al (2002), Gambacorta (2005), Kishan and Opiela (2006), and Altunbas et al (2010).…”

Monetary policy, bank lending and corporate investment

“…Our results demonstrate the importance of using the bank-specific interest rate to examine the effect of the interest rate on the supply of bank loans. Otherwise one may get to less robust conclusions: in a closely relate study, Rondorf (2012), using the aggregate level data set, finds that the interest rate, which is measured as the yield on a 10-year government bond, has no effect on bank loans for a sample of countries in the European monetary union over the period 1999-2008. Overall, regardless of whether we include bank-fixed effects or countryfixed effects, the negative effect of the lending rate continues to hold in all specifications.…”