Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243276 
Year of Publication: 
2021
Series/Report no.: 
SAFE Working Paper No. 206
Version Description: 
August 16, 2021
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We derive three testable predictions from a bank-P2P lender model of competition: (a) P2P lending grows when some banks are faced with exogenously higher regulatory costs; (b) P2P loans are riskier than bank loans; and (c) the risk-adjusted interest rates on P2P loans are lower than those on bank loans. We test these predictions against data on P2P loans and the consumer bank credit market in Germany and find empirical support. Overall, our analysis indicates that P2P lenders are bottom fishing, especially when regulatory shocks create a competitive disadvantage for some banks.
Subjects: 
P2P lending
bank lending
competition
JEL: 
G21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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