Changes in Bank Credit Supply and CI Loan Growth
Table 1 presents the results of regressing CI loan growth on the tightening index and the https://yourloansllc.com/bad-credit-loans-ok/ reported change in CI loan demand for the period from 1990 to 2019. The estimates in column 1, which omits the quarter fixed effects, imply that a one standard deviation increase in the tightening index is associated with a 3.13 percentage point drop in CI loan growth in the following year.
Columns 2 and 3 add macroeconomic controls and quarter fixed effects to the specification, respectively. 7 The predicted effects of tightening ents are accounted for, indicating that banks tend to tighten during times of stress, when balances would fall even without a change in supply conditions.