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We quantify the real effects of the bank-lending channel exploiting the dramatic liquidity drought in interbank markets that followed the 2007 financial crisis as a source of variation in credit supply. Using a large sample of matched firm–bank data from Italy, we find had the interbank market not collapsed, investment expenditure would have been more than 20% higher and would have increased by around 30 cents per additional euro of available credit at the average firm. We also find that credit shocks affect the firm's value added, employment and input purchases, and propagate through firms' trade credit chains.

»Klassifikations-Lagen. Lebenschancen in der neoliberalen Ära«. This article examines the stratifying effects of economic classifications. We argue that in the neoliberal era market institutions increasingly use actuarial techniques to split and sort individuals into classification situations that shape lifechances. While this is a general and increasingly pervasive process, our main empirical illustration comes from the transformation of the credit market in the United States. This market works as both as a leveling force and as a condenser of new forms of social difference. The U.S. banking and credit system has greatly broadened its scope over the past twenty years to incorporate previously excluded groups. We observe this leveling tendency in the expansion of credit amongst lower-income households, the systematization of overdraft protections, and the unexpected and rapid growth of the fringe banking sector. But while access to credit has democratized, it has also differentiated. Scoring technologies classify and price people according to credit risk. This has allowed multiple new distinctions to be made amongst the creditworthy, as scores get attached to different interest rates and loan structures. Scores have also expanded into markets beyond consumer credit, such as insurance, real estate, employment, and elsewhere. The result is a cumulative pattern of advantage and disadvantage with both objectively measured and subjectively experienced aspects. We argue these private classificatory tools are increasingly central to the generation of „market-situations“, and thus an important and overlooked force that structures individual life-chances. In short, classification situations may have become the engine of modern class situations.

Maintaining savings is an important financial goal. Yet there are times when savings should be spent, such as when people face unavoidable costs, and spending their savings allows them to avoid high interest rate debt. Existing behavioral research has focused on consumer decisions between savings and discretionary spending and has proposed interventions to promote savings in these contexts. However, when spending is not discretionary, such interventions could risk exacerbating a pattern found in economic research in which people borrow high interest rate debt while maintaining savings that earn low levels of interest. To examine how mental accounting interacts with considerations of personal responsibility and guilt to contribute to this pattern, this article explores whether people spend their savings when they need money most: during emergencies. Six studies reveal that people's tendency to preserve savings by borrowing from a high interest rate credit option varies as a function of the savings' intended use. Paradoxically, people are most likely to turn to high interest rate credit with the belief that doing so is the responsible option.

Information on borrower quality is a fundamental issue in debt contracting, corporate and consumer finance, and financial intermediation. We investigate the link between account activity and information production on borrower risk. Based on a unique data set, we find that credit line usage, limit violations, and cash inflows exhibit abnormal patterns approximately 12 months before default events. Measures of account activity substantially improve default predictions and are especially helpful for monitoring small businesses and individuals. Furthermore, early warning indications result in higher loan spreads, and in a higher likelihood of limit reductions and complete write-offs. Our study shows that account activity provides a real-time window into the borrower's cash flows, thus explaining why banks have an advantage in providing certain types of debt financing.

We use a new panel data set of credit card accounts to analyze how consumers responded to the 2001 federal income tax rebates. We estimate the monthly response of credit card payments, spending, and debt, exploiting the unique, randomized timing of the rebate disbursement. We find that, on average, consumers initially saved some of the rebate, by increasing their credit card payments and thereby paying down debt. But soon afterward their spending increased, counter to the permanent income model. Spending rose most for consumers who were initially most likely to be liquidity constrained, whereas debt declined most (so saving rose most) for unconstrained consumers.

Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In a field study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and to have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.

The literature on the determinants of firms' financing constraints has paid little attention to gender as a determinant of access to finance. Using data for 34,342 firms from 90 developing countries, the paper analyzes the determinants of firms' financing constraints and assesses whether female-owned firms are more financially constrained than male-owned businesses. The results show that female-owned firms in sub-Saharan Africa are more likely to be financially constrained than male-owned firms, but there is no gender gap in other developing regions. The gender gap in sub-Saharan Africa is robust to variations in specifications and econometric estimation procedures.

Ecosystem service markets are increasingly used as a policy solution to environmental problems ranging from endangered species to climate change. Such markets trade in ecosystem credits created at restoration sites where conservation projects are designed and built to compensate for regulated environmental impacts. \"Credit stacking\" occurs when multiple, spatially overlapping credits representing different ecosystem services are sold separately to compensate for different impacts. Discussion of stacking has grown rapidly over the past three years, and it will generate increasing interest given the growing multibillion-dollar international market in carbon, habitat, and water-quality credits. Because ecosystem functions at compensation sites are interdependent and integrated, stacking may result in net environmental losses. Unless stacked compensation sites and impact sites are treated symmetrically in the accounting of environmental gains and losses, stacking may also cause environmental gains at compensation sites to be more fully accounted for than losses at impact sites. Stacking should be used with caution until science-based methods, which can account for the ecological relationships between distinct ecosystem credits present at a conservation site, are developed and deployed.

A growing body of evidence shows that America’s racial geography shapes access to basic financial services (e.g. banking), highlighting a mechanism connecting segregation to economic vulnerability: spatially organized institutional marginalization.s While the practices and policies of “mainstream” commercial banks are central to this dynamic, the costs they impose on the communities they serve have been understudied. This study leverages survey data from a stratified random sample of 1344 banks across the United States to investigate variation in the costs and fees of entry-level checking accounts at commercial banks. Our evidence shows banks charge more to open and maintain checking accounts in neighborhoods and cities with larger Black and Latinx populations even after controlling for demographic and socioeconomic characteristics as well as market competition. The higher costs of banking imposed on Black and Latinx communities are further compounded by parallel disparities in income. These findings reveal the unequal costs of banking in segregated America.

We examine whether the cross-country incidence and severity of the 2008-09 global recession is systematically related to precrisis macroeconomic and financial factors. We find that the precrisis level of development, increases in the ratio of private credit to GDP, current account deficits, and openness to trade are helpful in understanding the intensity of the crisis. International risk sharing did little to shield domestic demand from the country-specific component of output declines, while those countries with large pre-crisis current account deficits saw domestic demand fall by much more than domestic output during the crisis.