Series: Working Papers. 2201.
Author: Ryan Banerjee and José-María Serena
Transmission of monetary policy
- Monetary policy
- Financial institutions, Banks
- Credit
Published in: Journal of Money Credit and Banking, online (November 2024)
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Abstract
Direct lenders, non-bank credit intermediaries with low leverage, have become increasingly important players in corporate loan markets. In this paper we investigate the role they play in the monetary policy transmission mechanism, using syndicated loan data covering the 2000-2018 period. We show that direct lenders are more likely to join loan syndicates whenever monetary policy announcements trigger a contraction in borrowers’ net worth irrespective of the directional change in interest rates. Thus, our findings suggest that direct lenders dampen the financial accelerator channel of monetary policy.