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| Type | Scientific Publication In Electronic Form |
| Scope | Discipline-based scholarship |
| Title | Some borrowers are more equal than others: Bank funding shocks and credit reallocation |
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| Language |
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| Place of Publication | VoxEU.org |
| Publisher | VOX CEPR Policy Portal |
| Date | 2020 |
| Abstract Text | The collapse of Lehman Brothers in September 2008 was an unprecedented shock to banks’ funding opportunities. Banks transmitted this funding shock to their borrowers, but not necessarily in a homogeneous way. For example, several papers indicate that there was significant heterogeneity in the geographical reallocation decisions of banks (e.g. De Haas and Van Horen 2012, Giannetti and Laeven 2012). In this column, we investigate a different type of reallocation, by providing a comprehensive and detailed analysis of the reallocation that Belgian banks pursued across sectors and firms. Banks operating in Belgium relied significantly on the interbank market for their funding. As can be seen in Figure 1, the total volume of interbank funding of banks active in Belgium was more than €500 billion in August 2008; a year later, more than half of that funding had dried up. This drying-up was significant for the banks and firms active in Belgium. The average firm in Belgium borrowed from a bank for which this interbank funding outflow represented 10% of its total assets. |
| Free access at | Official URL |
| Official URL | https://voxeu.org/article/bank-funding-shocks-and-credit-reallocation |
| Related URLs | |
| Other Identification Number | merlin-id:19293 |
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