Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/225986
Authors: 
Bedayo, Mikel
Jiménez, Gabriel
Peydró, José-Luis
Vegas, Raquel
Year of Publication: 
2020
Abstract: 
We show that loan origination time is key for bank lending standards, cycles, defaults and failures. We exploit the credit register from Spain, with the time of a loan application and its granting. When VIX is lower (booms), banks shorten loan origination time, especially to riskier firms. Bank incentives (capital and competition), capacity constraints, and borrower-lender information asymmetries are key mechanisms driving results. Moreover, shorter (loan-level) origination time is associated with higher ex-post defaults, also using variation from holidays. Finally, shorter precrisis origination time —more than other lending conditions— is associated with more bank-level failures in crises, consistent with lower screening.
Subjects: 
loan origination time
lending standards
credit cycles
defaults
bank failures
screening
JEL: 
G01
G21
G28
E44
E51
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.