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Nonbank Lending and Credit Cyclicality

Quirin Fleckenstein1; Manasa Gopal2; Germán Gutiérrez3; Sebastian Hillenbrand4

1 HEC Paris · 2 Georgia Tech , · 3 University of Washington · 4 Harvard Business School

Review of Financial Studies 2026

Abstract We study the contribution of banks and nonbanks to cyclical fluctuations in the supply of syndicated loans. We find that a reduction in nonbank lending explains most of the contraction in syndicated credit and the associated employment losses during the Global Financial Crisis, while banks’ contribution is small. Looking over multiple cycles, we find nonbanks’ credit supply is roughly three times as cyclical as banks’, suggesting that nonbanks are the main drivers of syndicated lending cycles. A model in which government support stabilizes bank funding can explain the higher cyclicality of nonbanks.

DOI
10.1093/rfs/hhaf024
Volume
39 (4)
Pages
925-966
Language
en
Export
BibTeX
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