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Shocked by Bank Funding Shocks: Evidence from Consumer Credit Cards.
- Source :
- Review of Financial Studies; Oct2023, Vol. 36 Issue 10, p3906-3952, 47p
- Publication Year :
- 2023
-
Abstract
- Using the near universe of U.S. consumer credit cards, we show that banks transmit their wholesale funding shocks to consumers by reducing their credit card limits. Credit-constrained consumers who are unable to hedge against the transmitted shock by accessing other credit cards experience a stronger and more persistent reduction in aggregate credit card limits at the consumer level. Consequently, these credit-constrained consumers reduce their aggregate credit card borrowing. Our results document a credit card lending channel for the transmission of adverse bank shocks and show who bears the costs of fragile bank funding structures. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]
- Subjects :
- CREDIT cards
ECONOMIC shock
BANKING industry
CONSUMERS
Subjects
Details
- Language :
- English
- ISSN :
- 08939454
- Volume :
- 36
- Issue :
- 10
- Database :
- Complementary Index
- Journal :
- Review of Financial Studies
- Publication Type :
- Academic Journal
- Accession number :
- 172041794
- Full Text :
- https://doi.org/10.1093/rfs/hhad039