Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203273 
Year of Publication: 
2014
Series/Report no.: 
SAFE Working Paper No. 39
Version Description: 
February 2014
Publisher: 
Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe, Frankfurt a. M.
Abstract: 
We employ a unique identification strategy linking survey data on household consumption expenditure to bank-level data to estimate the effects of bank financial distress on consumer credit and consump- tion expenditures. We show that households whose banks were more exposed to funding shocks report lower levels of non-mortgage liabilities. This, however, does not result in lower levels of consumption. Households compensate by drawing down liquid assets to smooth consumption in the face of a temporary adverse lending supply shock. The results contrast with recent evidence on the real effects of finance on firms' investment and employment decisions.
Subjects: 
Credit supply
banking
financial crisis
consumption expenditure
liquid assets
consumption smoothing
JEL: 
E21
E44
G21
G01
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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