Arbeitspapier

Multiple lending, credit lines and financial contagion

Multiple lending has been widely investigated from both an empirical and a theoretical perspective. Nevertheless, the implications of multiple lending for the stability of the banking system still need to be understood. By lending to a common set of borrowers, banks are interconnected and then exposed to financial contagion phenomena, even if not directly. In this paper, we investigate a specific type of externality that originates from those borrowers that obtain liquidity from more than one bank. In this case, contagion may occur if a bank hit by a liquidity shock calls in some loans and borrowers then pay them back by drawing money from other banks. We show that, under certain circumstances that make other sources of liquidity unavailable or too costly, multiple lending might be responsible for a large liquidity shortage.

ISBN
978-92-899-2811-3
Sprache
Englisch

Erschienen in
Series: ECB Working Paper ; No. 2089

Klassifikation
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Thema
interbank market
financial contagion
systemic risk
multiple lending
credit lines

Ereignis
Geistige Schöpfung
(wer)
Cappelletti, Giuseppe
Mistrulli, Paolo Emilio
Ereignis
Veröffentlichung
(wer)
European Central Bank (ECB)
(wo)
Frankfurt a. M.
(wann)
2017

DOI
doi:10.2866/662983
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Cappelletti, Giuseppe
  • Mistrulli, Paolo Emilio
  • European Central Bank (ECB)

Entstanden

  • 2017

Ähnliche Objekte (12)