Year: 2018
Author: Anastasiou, Dimitrios, Drakos, Konstantinos, Giannoulakis, Stylianos
Applied Economics Quarterly, Vol. 64 (2018), Iss. 1 : pp. 5–16
Abstract
Abstract
The purpose of this study is to investigate the link between bank credit standards (CS hereafter) and business cycle fluctuations. This is the first empirical study which attempts to examine whether business cycle affects bank CS. We use quarterly survey-data on CS taken from the Bank Lending Survey from 2003Q1 to 2016Q1, for 14 Euro-area countries. We find that business cycle and GDP growth trend exert a negative influence on CS, and thus business cycle and trend are two major drivers of the tightening or easing of the CS. We also find that the two components (cyclical and trend) of the real GDP decomposition affect in a symmetric way CS. Moreover, symmetry of impacts was found between the CS and the business cycle and trend for large vs. small firms. Our findings could be helpful for both the European bank regulatory authorities and for the banks’ loan officers when they are designing macroprudential policies.
JEL classifications: E30, E32, E44, G21
Keywords: credit standards, business cycle, bank lending survey, loan supply
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Journal Article Details
Publisher Name: Global Science Press
Language: English
DOI: https://doi.org/10.3790/aeq.64.1.5
Applied Economics Quarterly, Vol. 64 (2018), Iss. 1 : pp. 5–16
Published online: 2018-01
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 12
Author Details
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Perceived vs actual financial crisis and bank credit standards: Is there any indication of self-fulfilling prophecy?
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| Section Title | Page | Action | Price |
|---|---|---|---|
| Dimitrios Anastasiou / Konstantinos Drakos / Stylianos Giannoulakis: Are Bank Credit Stand\nards Affected by the Business Cycle? Evidence from the Euro Area | 1 | ||
| Abstract | 1 | ||
| 1. Introduction | 1 | ||
| 2. Literature Review | 2 | ||
| 2.1 A Brief Literature Review on the Interplay Between Banks’ Activity and the Business cycle | 2 | ||
| 2.2 A Brief Literature Review on Credit Standards | 3 | ||
| 3. Data and Variables | 4 | ||
| 4. Econometric Methodology | 7 | ||
| 5. Estimation Results | 9 | ||
| 6. Conclusions | 1 | ||
| References | 1 |