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Anxious periods and bank lending

Delis, MD, Kouretas, G and Tsoumas, C (2014) Anxious periods and bank lending Journal of Banking and Finance, 38. pp. 1-13.

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We examine the lending behavior of banks during anxious periods. The main characteristic of anxious periods is that the perceptions and expectations about economic conditions worsen for economic agents even though the economy is not in a recession. We identify distinct periods of anxiety for consumers, CEOs (firms) and analysts. Subsequently, we study the lending behavior of US banks during the anxious quarters from 1985 to 2010, using bank-level data. The results show that banks’ lending falls when consumers and analysts are anxious, and this effect is more pronounced when banks hold a higher level of credit risk. These effects are more pronounced in anxious periods that were followed by recessions, and in these periods loan growth also responds negatively to the anxiety of CEOs. Yet, these effects are quite less prevalent in the period after 2001.

Item Type: Article
Divisions : Surrey research (other units)
Authors : Delis, MD, Kouretas, G and Tsoumas, C
Date : 1 January 2014
DOI : 10.1016/j.jbankfin.2013.09.009
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:27
Last Modified : 24 Jan 2020 14:42

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