NDLI: Supervisory Ratings and Bank Lending to Small Businesses During the Financial Crisis and Great Recession

Content Provider	Springer Nature Link
Author	Kiser, Elizabeth K. Prager, Robin A. Scott, Jason R.
Copyright Year	2015
Abstract	Bank lending to small firms in the U.S. fell substantially during the recent financial crisis and ensuing recession. Because small firms account for a disproportionate share of new job creation, lending to these firms could have important implications for the pace of economic recovery. This paper examines the extent to which changes in banks’ supervisory ratings are associated with changes in the growth rate of their lending to small businesses. We estimate the relationship between changes in small banks’ supervisory ratings and changes in their small commercial and industrial (C&I) or small commercial real estate (CRE) loans to businesses over 2007–2010. Controlling for a large set of other relevant factors, we find that small banks that experienced ratings downgrades during 2007–2010 exhibited significantly lower rates of growth in small C&I loans and small CRE loans outstanding compared with banks that maintained their ratings at healthy levels during the same period. We employ an innovative approach using the timing of bank exams to address the question of whether the slower growth in small business lending at downgraded banks is attributable mainly to aspects of the banks’ financial health that are not fully reflected in balance sheet data or to the ratings downgrades themselves. Our results suggest that the downgrades themselves did not directly influence bank lending to small businesses during this period.
Starting Page	163
Ending Page	186
Page Count	24
File Format	PDF
ISSN	09208550
Journal	Journal of Financial Services Research
Volume Number	50
Issue Number	2
e-ISSN	15730735
Language	English
Publisher	Springer US
Publisher Date	2015-08-25
Publisher Place	New York
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Banking CAMELS ratings Supervisory ratings Bank lending Small business lending Financial crisis Financial Services Macroeconomics/Monetary Economics//Financial Economics
Content Type	Text
Resource Type	Article
Subject	Finance Accounting Economics and Econometrics

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

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