What Does Peer-to-Peer Lending Evidence Say About the Risk-taking Channel of Monetary Policy?

This paper uses loan application-level data from a Chinese peer-to-peer lending platform to study the risk-taking channel of monetary policy. By employing a direct ex-ante measure of risk-taking and estimating the simultaneous equations of loan approval and loan amount, we are the first to provide quantitative evidence of the impact of monetary policy on the risk-taking of nonbank financial institution. We find that the search-for-yield is the main workhorse of the risk-taking effect, while we do not observe consistent findings of risk-shifting from the liquidity change. Monetary policy easing is associated with a higher probability of granting loans to risky borrowers and a greater riskiness of credit allocation, but these changes do not necessarily relate to a larger loan amount on average.

24. Juni 2019

Autoren Yiping Huang Xiang Li Chu Wang


Für Wissenschaftler/innen

Für Journalistinnen/en

Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoWeltoffen Logo