We explore empirically how the time-varying allocation of credit across firms with heterogeneous credit quality matters … credit allocation, captured by Greenwood and Hanson (2013)'s ISS indicator, helps predict downside risks to GDP growth and … systemic banking crises, two to three years ahead. Our analysis indicates that the riskiness of credit allocation is both a …

was also disproportionally larger for firms with limited credit market access. Moreover, smaller firms were less likely to … have access to safer banks: those that were better capitalized banks and with a presence in the credit default swap market …. Our results imply that the tightening of credit market conditions during the crisis, coupled with limited credit market …

This paper studies episodes in which aggregate bank credit contracts alongside expanding economic activity-credit …--on average, they occur every five years. By comparison, banking crises take place every eight years on average. Credit reversals …

Assessing when credit is excessive is important to understand macro-financial vulnerabilities and guide macroprudential … policy. The Basel Credit Gap (BCG) - the deviation of the credit-to-GDP ratio from its long-term trend estimated with a one … warning of banking crises. However, for a number of European countries this indicator implausibly suggests that credit should …

This paper empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a … sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of … trading partners are among the most important determinants of the post-crisis bank credit slowdown. Structural variables such …