Abstract:Financial technology (FinTech) companies are increasingly important in the financial system. We investigate the effect of peer-to-peer (P2P) lending on traditional banks' loan losses by examining whether and how P2P lending activity in a state affects loan loss provisions of that state's commercial banks. If P2P lending helps borrowers repay their bank loans, banks might report lower loan loss provisions. However, if P2P lending results in higher leveraged borrowers, banks might accrue higher loan loss provisi… Show more
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