financing instruments for banks and means of payment for bank customers implies spillover effects of bank lending. After a bank … finances loans with new deposits, the deposit holders' payments cause reserves and deposits to flow from the lending bank to … that generate respectively strategic complementarity and strategic substitution in banks' lending decisions. We model bank …

Deposits finance bank lending and serve as means of payment for bank customers. Under uncertain payment flows, deposits … payment risk on bank lending, bridging the literatures on payment systems and credit supply. An interquartile increase in … dampens the bank lending channel of monetary policy transmission …