Institutional Investors, the Dollar, and U.S. Credit Conditions


2019/04/16 21:04



This paper documents that an appreciation of the U.S. dollar is associated with a reduction in the supply of commercial and industrial loans by U.S. banks. An increase in the broad dollar index by 2.5 points (one standard deviation) reduces U.S. banks' corporate loan originations by 10 percent. This decline is driven by a reduction in the demand for loans on the secondary market where prices fall and liquidity worsens when the dollar appreciates, with stronger effects for riskier loans. Today, the main buyers of U.S. corporate loans---and, hence, suppliers of funding for these loans---are institutional investors, in particular mutual funds, which experience outflows when the dollar appreciates. A shift of traditional financial intermediation to these relatively unregulated entities, which are more sensitive to global developments, has led to the emergence of this new channel through which the dollar affects the U.S. economy, which we term the secondary market channel.

本文发现,美元升值与美国银行商业和工业贷款供应减少有关。美元指数上涨2.5点(一个标准差)会使美国银行的公司贷款减少10%。这种下降的原因是二级市场上的贷款需求减少,价格下跌,当美元升值时流动性恶化,对风险较高的贷款产生更强的影响。如今,美国公司贷款的主要买家 - 以及因此这些贷款的供应商 - 是机构投资者,特别是共同基金,当美元升值时,它们会面临资金流出。传统金融中介向这些对全球发展更加敏感的相对不受管制的实体的转变导致了美元影响美国经济的新渠道,我们称之为二级市场渠道。

Keywords: Leveraged loan market ; Commercial and industrial loans ; U.S. dollar exchange rate ; Credit standards ; Institutional investors


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