Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships and the COVID Crisis / Lei Li, Philip Strahan.

Format:

Book

Author/Creator:

Li, Lei.

Contributor:

National Bureau of Economic Research.

Strahan, Philip.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28286.

NBER working paper series no. w28286

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Who Supplies PPP Loans

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We analyze bank supply of credit under the Paycheck Protection Program (PPP). The literature emphasizes relationships as a means to improve lender information, which helps banks manage credit risk. Despite imposing no risk, however, PPP supply reflects traditional measures of relationship lending: decreasing in bank size; increasing in prior experience, in commitment lending, and in core deposits. Our results suggest a new benefit of bank relationships, as they help firms access government-subsidized lending. Consistent with this benefit, we show that bank PPP supply, based on the structure of the local banking sector, alleviates increases in unemployment.

Notes:

Print version record

December 2020.