Bank Lending in the Knowledge Economy

By Giovanni Dell'Ariccia, Dalida Kadyrzhanova, Camelia Minoiu, Lev Ratnovski

November 7, 2017

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Format: Chicago

Giovanni Dell'Ariccia, Dalida Kadyrzhanova, Camelia Minoiu, and Lev Ratnovski. Bank Lending in the Knowledge Economy, (USA: International Monetary Fund, 2017) accessed November 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms use less tangible capital and invest more in intangible assets. We show that, as firms shift toward intangible assets that have lower collateral values, banks reallocate their portfolios away from commercial loans toward other assets, primarily residential real estate loans and liquid assets. This effect is more pronounced for large and less well capitalized banks and is robust to controlling for real estate loan demand. Our results suggest that increased firm investment in intangible assets can explain up to 20% of bank portfolio reallocation from commercial to residential lending over the last four decades.

Subject: Asset allocation, Asset and liability management, Bank credit, Banking, Financial institutions, Financial statements, Intangible capital, Loans, Money, National accounts, Public financial management (PFM)

Keywords: Asset allocation, Asset growth, Balance sheet, Bank assets, Bank capital, Bank capital erosion, Bank capitalization, Bank characteristic, Bank credit, Bank FE, Bank lending, Bank level, Bank portfolio, Bank portfolio component, Bank size, Capitalized bank, Commercial loans, Financial statements, Global, Intangible capital, Liquid assets, Loans, Portfolio allocation, Real estate loans, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/234
Stock No:

WPIEA2017234
ISBN:

9781484324899
ISSN:

1018-5941

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