Authors: Ricardo Correa, Julian di Giovanni, Linda S. Goldberg, and Camelia Minoiu
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Staff Reports
Trade Uncertainty and U.S. Bank Lending
Number 1076
November 2023 Revised February 2025
November 2023 Revised February 2025
JEL classification: F34, F42, G21
This paper uses U.S. credit register data and the 2018–2019 “trade war” to study the effects of uncertainty on domestic credit supply. Exploiting differences in banks’ ex-ante exposure to trade uncertainty, we find that increased uncertainty is associated with a broad lending contraction across their customer firms. This result is consistent with banks responding to uncertainty with “wait-and-see behavior,” where more exposed banks curtail risky exposures, reduce loan maturities, and adjust loan supply along both intensive and extensive margins. The lending contraction is larger for more capital-constrained banks and has significant real effects, especially for bank-dependent firms.
Author Disclosure Statement(s)
Ricardo Correa
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed by the Federal Reserve Board to ensure no violations of the rules applicable to the use of confidential supervisory information and in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Julian di Giovanni
Julian di Giovanni declares that he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Linda S. Goldberg
The author, Linda Goldberg, declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Camelia Minoiu
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed by the Federal Reserve Board to ensure no violations of the rules applicable to the use of confidential supervisory information and in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Julian di Giovanni
Julian di Giovanni declares that he has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Linda S. Goldberg
The author, Linda Goldberg, declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Camelia Minoiu
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
Suggested Citation:
Correa, Richard, Julian di Giovanni, Linda S. Goldberg, and Camelia Minoiu. 2023. “Trade Uncertainty and U.S. Bank Lending.” Federal Reserve Bank of New York Staff Reports, no. 1076, November. https://doi.org/10.59576/sr.1076
Correa, Richard, Julian di Giovanni, Linda S. Goldberg, and Camelia Minoiu. 2023. “Trade Uncertainty and U.S. Bank Lending.” Federal Reserve Bank of New York Staff Reports, no. 1076, November. https://doi.org/10.59576/sr.1076
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