अर्थशास्त्र और आर्थिक शिक्षा अनुसंधान जर्नल

1533-3604

अमूर्त

THE IMPACT OF BANK LENDING ON CREDIT SUPPLY AND THE REAL ECONOMY

Pedro Medeiros

In the context of the ecu crisis, we tend to show that the safety portfolio of banks plays a crucial role within the propagation of monetary shocks across countries. Victimization Italian loan-level information, we tend to show that the shock to the banks’ sovereign portfolio caused by Greek bailout was passed on to Italian companies through a credit contraction. This was significantly the case for banks with a lower capital and fewer stable funding. The contraction in credit was similar for each massive and little company; however it solely negatively affected the investment and employment selections of tiny companies. Money intermediaries play a basic role in enhancing economic process, disposition to companies and households and reallocating capital to the highest-value use.