|
EconStor >
Federal Reserve Bank of New York >
Staff Reports, Federal Reserve Bank of New York >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/60523
|
| | |
| Title: | | How and why do small firms manage interest rate risk? Evidence from commercial loans  |
| Authors: | | Vickery, James |
| Issue Date: | | 2005 |
| Series/Report no.: | | Staff Report, Federal Reserve Bank of New York 215 |
| Abstract: | | Although small firms are particularly sensitive to interest rates and other external shocks, empirical work on corporate risk management has focused instead on large public companies. This paper studies fixed-rate and adjustable-rate loans to see how small firms manage their exposure to interest rate risk. Credit-constrained firms are found to match significantly more often with fixed-rate loans, consistent with prior research showing that the supply of internal and external finance shrinks during periods of rising interest rates. Banks originate a higher share of adjustable-rate loans than other lender types, ameliorating maturity mismatch and exposure to the lending channel of monetary policy. Time-series patterns in the share of fixed-rate commercial loans are consistent with recent evidence on debt market timing. |
| Subjects: | | fixed-rate loan adjustable-rate loan corporate risk management interest rate risk |
| JEL: | | G21 G30 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Staff Reports, Federal Reserve Bank of New York
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/60523
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|