How does the large market for credit score improvement products affect consumers and market efficiency? For consumers …, we use a randomized encouragement design on a standard credit builder loan (CBL) and find null average effects on scores … credit activity. CBLs induce delinquency on pre-existing loan obligations, suggesting that even a seemingly modest additional …

Standard economic theory says that unsecured, high-interest, short-term debt — such as borrowing via credit cards and … bank overdraft facilities — helps individuals smooth consumption in the event of transitory income shocks. This paper shows … income shock of unemployment. Instead, individuals smooth their credit card debt and overdrafts by adjusting consumption. We …

a bank/brokerage-credit-fueled stock-market bubble. The direct effect is a 25 cent increase in a stock's market …Research on leverage and asset-price fluctuations focuses on the direct effect of lax bank lending enabling financially …-constrained investors to take excessive risks. Ignored are unconstrained investors speculating on higher prices during credit booms. To …

A growing literature shows that credit indicators forecast aggregate real outcomes. While researchers have proposed … simple, frictionless, model explains empirical findings commonly attributed to credit cycles. Our key assumption is that … firms have heterogeneous exposures to underlying economy-wide shocks. This leads to endogenous dispersion in credit quality …

This paper develops a network model of interbank lending, in which banks decide to extend credit to their potential … literature on financial networks, we focus on how anticipation of future defaults may result in ex ante “credit freezes,” whereby … banks refuse to extend credit to one another. We first characterize the terms of the interbank contracts and the patterns of …

Using comprehensive loan-level data in China, we investigate how the deregulation on bank entry barriers alters local … credit misallocation accounts for 0.25% of GDP losses and is mainly due to SOEs’ soft budget constraints. Private firms need …

separate firm-borrowing shocks from bank-supply shocks using a vast sample of matched bank-firm lending data. We decompose … aggregate loan movements in Japan for the period 1990 to 2010 into bank, firm, industry, and common shocks. The high degree of … role for granular shocks as in Gabaix (2011). We show that idiosyncratic granular bank-supply shocks explain 30-40 percent …

competitive interactions between banks and non-bank lenders (fintech firms). Trust enables lenders to have assured access to …

This paper examines the use of credit derivatives by US bank holding companies from 1999 to 2003 with assets in excess …'s loan portfolio and negatively or not related to other types of bank loans. The use of credit derivatives by banks is … of one billion dollars. Using the Federal Reserve Bank of Chicago Bank Holding Company Database, we find that in 2003 …