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- Title
The substitutions of bank for non-bank corporate finance: evidence for the United Kingdom.
- Authors
Baumann, Ursel; Hoggarth, Glenn; Pain, Darren
- Abstract
The aim of this paper is to investigate empirically the links between alternative forms of corporate debt finance using data on the UK economy. Based on a small panel data set of UK-owned banks for the 1986 Q3-2001 Q3 period, we estimate equations for the quantity of bank credit to the corporate sector. In particular, we investigate the extent to which changes in non-bank finance — either from (bond and other debt securities) markets or from non-bank financial institutions — affect the growth in corporate loans of UK-owned banks. In doing so, we aim to investigate the degree of substitutability or complementarity between bank and non-bank finance. Moreover, we examine whether these relationships are different in periods when non-bank finance falls sharply to assess whether bank credit acts as a back-up source of funding when other forms of finance are not readily available.
- Subjects
CORPORATE debt; CORPORATE finance; DEBT; ECONOMIC conditions in Great Britain; FINANCE
- Publication
Bank of England Quarterly Bulletin, 2005, Vol 45, Issue 3, p381
- ISSN
0005-5166
- Publication type
Article