L’inscription par mail à seminaire-recherche-acpr@banque-france.fr  est gratuite mais obligatoire pour y assister. Si vous souhaitez être informés des prochains évènements, merci d’envoyer un mail à la même adresse.

L’ACPR héberge également les séminaires mensuels de la Chaire ACPR : la page dédiée aux séminaires de la Chaire ACPR est accessible ici.

Abstract:

We study the effect of Public Guaranteed Loans (PGLs) on bank risk-taking during the Covid-19 pandemic in France. The presence of guarantee schemes may encourage riskier lending, pushing banks to lend to riskier borrowers or worsening incentives to prevent write-offs of loan applicants.  Investigating the risk-taking channel of PGLs at the extensive margin, we find that smaller and riskier firms had a higher probability of obtaining a PGL. Yet, isolating credit demand from credit supply at the intensive margin,  we find that safer firms had higher amounts of PGLs, while banks that were more exposed to non-performing loans (NPLs) before the crisis made smaller PGLs to risky firms, thereby using the guaranteed loan program to improve their financial position and reduce exposure to NPLs. This result remains valid when looking at the total amount of outstanding credit. By examining the substitution effect of SGLs, we find that banks substituted more PGLs for unsecured loans when firms are sounder. Finally, at the bank level, we find that PGLs have no impact on the overall credit risk of banks credit portfolio.

Abstract :

 The literature on the effects of bank market power on access to credit has produced many results that are sometimes contradictory. Yet, this paper draws attention to a problematic aspect of traditional measures of bank market power, which are based on unconsolidated data and ignore the national market power of groups. This results in an underestimation that I propose to correct. Using a panel of more than 55,000 French covering the period 2006-2017, I consider a set of both unconsolidated and consolidated measures of bank market power (structural and non-structural). My results strongly support the market power hypothesis which emphasizes the virtues of competition on interest rate setting. While unconsolidated measures of bank market power do not affect the cost of credit, I find that consolidated measures increase the interest rate charged. This effect is stronger for small and opaque firms and is concentrated on long-term loans. These findings highlight the need to take into account bank capital linkages to fully assess the implications of bank market power.