• Media type: E-Book
  • Title: Why Do Bank-Dependent Firms Bear Interest-Rate Risk?
  • Contributor: Kirti, Divya [Author]
  • Published: [S.l.]: SSRN, [2017]
  • Published in: IMF Working Paper ; No. 17/3
  • Extent: 1 Online-Ressource (57 p)
  • Language: English
  • DOI: 10.2139/ssrn.2924366
  • Identifier:
  • Origination:
  • Footnote: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 2017 erstellt
  • Description: I document that floating-rate loans from banks (particularly important for bank-dependent firms) drive most variation in firms' exposure to interest rates. I argue that banks lend to firms at floating rates because they themselves have floating-rate liabilities, supporting this with three key findings. Banks with more floating-rate liabilities, first, make more floating-rate loans, second, hold more floating-rate securities, and third, quote lower prices for floating-rate loans. My results establish an important link between intermediaries' funding structure and the types of contracts used by non-financial firms. They also highlight a role for banks in the balance-sheet channel of monetary policy
  • Access State: Open Access