Stress Testing Banks' Digital Capabilities: Evidence From the COVID-19 Pandemic
Banks' IT capabilities affect their ability to serve customers during the demand shock for digital banking services generated by the COVID-19 pandemic. Amid mobility restrictions, banks with better IT experience larger reductions in physical branch visits and larger increases in website traffic, implying a larger shift to digital banking. Stronger-IT banks are able to originate more PPP loans to small business borrowers, especially in areas with more severe COVID-19 outbreaks, higher internet use, and higher bank competition. Those banks also attract more deposit flows. Our findings are robust to using instrumental variables that capture exogenous variation in bank IT.
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Stress Testing Banks' Digital Capabilities: Evidence From the COVID-19 Pandemic
- Published on 02/10/2022
- FR
- PDF (374.11 KB)
Updated on: 02/10/2022 16:34