Acharya, Viral V.; Engle, Robert F.; Steffen, Sascha - National Bureau of Economic Research - 2021
We study the crash of bank stock prices during the COVID-19 pandemic. We find evidence consistent with a "credit line … drawdown channel". Stock prices of banks with large ex-ante exposures to undrawn credit lines as well as large ex-post gross … drawdowns decline more. The effect is attenuated for banks with higher capital buffers. These banks reduce term loan lending …
