We develop a new theory of information production during credit booms. In our model, entrepreneurs need credit to … projects. In equilibrium, the collateralization-screening mix depends on the value of aggregate collateral. High collateral … important dynamic implications. During credit booms driven by high collateral values (e.g. real estate booms), the economy …

, the balance depends on the degree of bank capitalization: when facing a policy rate cut, well capitalized banks decrease …We provide a theoretical foundation for the claim that prolonged periods of easy monetary conditions increase bank risk … taking. The net effect of a monetary policy change on bank monitoring (an inverse measure of risk taking) depends on the …

This paper analyzes the impact of public credit guarantee schemes on the allocation and performance of bank credit … from banks to which they have larger pre-COVID credit exposures, measured as the share of the firm’s total credit … outstanding with the bank before the shock. This effect is more pronounced for risky firms and for firms in more pandemic …

provisions tend to be more procyclical at larger and better capitalized banks. The procyclicality of loan loss provisions can … explain about two-thirds of the variation of bank capitalization over the business cycle. We estimate that provisioning …