rewards and promotions to select groups of borrowers. Finally, we show that consumers at banks with a gap increase their … projections as an exogenous shock to banks and analyze how this shock is transmitted to consumer credit markets. First, we … document that banks in the 90th percentile of the capital gap reduce their new supply of risky credit by 13 percent compared …

findings are consistent with an economic environment in which the incentives of low-risk consumers to obtain a mortgage … decrease when the cost of obtaining a loan rises. As a result, mortgage originators generate mortgages from a pool of consumers …

that a lower reserve ratio usually translates into a higher exchange value of bank liabilities, benefiting the consumers …