Banks as Lenders of First Resort: Evidence from the COVID-19 Crisis

Lei Li · Philip E. Strahan · Song Zhang

312 citations0/0 files storedThe Review of Corporate Finance Studies

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Banking stability, regulation, efficiency Monetary Policy and Economic Impact COVID-19 Pandemic Impacts

Abstract

Abstract In March 2020, banks faced the largest increase in liquidity demands ever observed. Firms drew funds on a massive scale from preexisting credit lines in anticipation of cash flow and financial disruptions stemming from the advent of the COVID-19 crisis. The increase in liquidity demands was concentrated at the largest banks, who serve the largest firms. Precrisis financial condition did not constrain large banks’ liquidity supply. Coincident inflows of funds from both the Federal Reserve’s liquidity injection programs and depositors, along with strong preshock bank capital, explain why banks were able to accommodate these liquidity demands. (JEL G21, G28) Received June 7, 2020; editorial decision June 23, 2020 by Editor Isil Erel.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 312 citations exist upstream.

References

2009Bank lending during the financial crisis of 2008 2020Corporate Immunity to the COVID-19 Pandemic 2002Banks as Liquidity Providers: An Explanation for the Coexistence of Lending and Deposit‐taking 2009Bank Liquidity Creation 2011Liquidity risk management and credit supply in the financial crisis 2020The Unprecedented Stock Market Impact of COVID-19 2020How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey 2006Banks' Advantage in Hedging Liquidity Risk: Theory and Evidence from the Commercial Paper Market

Cited by

2020Bank Systemic Risk around COVID-19: A Cross-Country Analysis 2021Flattening the Illiquidity Curve: Retail Trading During the COVID-19 Lockdown 2021The Dynamics of Non-Performing Loans during Banking Crises: A New Database with Post-COVID-19 Implications 2021Banking research in the time of COVID-19 2021Systemic risk and the COVID challenge in the european banking sector 2023

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.