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Who Supplies PPP Loans (And Does it Matter)? Banks, Relationships and the COVID Crisis
National Bureau of Economic Research Working Paper Series ; No. 28286, 2020.
Article in English | NBER | ID: grc-748647
ABSTRACT
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.

Full text: Available Collection: Databases of international organizations Database: NBER Type of study: Prognostic study Language: English Journal: National Bureau of Economic Research Working Paper Series Year: 2020 Document Type: Article

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Full text: Available Collection: Databases of international organizations Database: NBER Type of study: Prognostic study Language: English Journal: National Bureau of Economic Research Working Paper Series Year: 2020 Document Type: Article