Chair: Klaas Muller

Abstract: Using data on entrepreneurs’ private wealth, small-business loan applications, and bank credit scores, we show that monetary policy changes the weight banks attach to private wealth in lending decisions. Among applicants receiving nearly identical credit assessments, monetary easing raises loan approval rates more for low-wealth entrepreneurs than  for high-wealth entrepreneurs. Exploiting the bank’s approval cutoff, we show that loan approval increases entrepreneurs’ income and wealth. These findings imply monetary policy  may influence the wealth distribution among entrepreneurs over time. Survey data from 19 euro area countries corroborate the findings and indicate that the channel operates through less liquid and weakly capitalized banks.

Contact: Gianmarco Ruzzier

Location: Sala reuniones DGE

Timetable: 2026.09.09 (12:00-13:00).