TY  - SER
AU  - Buchak, Greg
AU  -  Matvos, Gregor
AU  -  Piskorski, Tomasz
AU  -  Seru, Amit
TI  - Beyond the Balance Sheet Model of Banking: Implications for Bank Regulation and Monetary Policy
SN  - 0022-3808
PB  - Journal of Political Economy
KW  -  Bank Balance Sheet Lending
KW  -  Bank Regulation
KW  -  Banking
KW  - Monetary Policy
N2  - We empirically document two adjustment margins that are usually absent from the predominant “bank balance sheet lending” view of financial intermediation. For the shadow bank substitution margin, shadow banks substitute for traditional banks among loans that are easily sold. For the balance sheet retention margin, banks switch between balance sheet lending and selling loans based on their balance sheet strength. Estimates from a structural model show that these margins significantly shape policy responses, dampening the effect of capital requirements on lending whose costs are borne by wealthier borrowers. Secondary-market disruptions such as quantitative easing have significantly larger impacts on lending than capital requirements
UR  - https://www.journals.uchicago.edu/doi/10.1086/726703
ER  -