In the mid-2000s, federal bank regulatory agencies became alarmed by steadily increasing concentrations of commercial … of macroprudential regulation to have a significant and broad influence on bank behavior. …

Do firms use credit line drawdowns to finance investment? Using a unique dataset of 467 COMPUSTAT firms with credit … already increased in 2007, precisely when disruptions in bank funding markets began to squeeze aggregate liquidity. Consistent … with theory, our results confirm that firms use drawdowns to sustain investment after an idiosyncratic liquidity shock …

flows to fund investment), and that the sensitivity of investment to internal cash flows is higher for firms that report …

investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question … financial shocks. By influencing the effective supply of credit, both types of shocks exert a powerful effect on investment and …