Rules versus discretion in loan rate setting.

Market; Order; Rules;

Hazardous Times for Monetary Policy: What do Twenty-three Million Bank Loans Say about the Effects of Monetary Policy on Credit Risk?

We investigate the impact of the stance and path of monetary policy on the level of credit risk of individual bank loans and on lending standards. We employ the Credit Register of the Bank of Spain that contains detailed monthly information on virtually all loans granted by all credit institutions operating in Spain during the last twenty-two years – generating almost twenty-three million bank loan records in total. Spanish monetary conditions were exogenously determined during the entire sample period. Using a variety of duration models we find that lower short-term interest rates prior to loan origination result in banks granting more risky new loans. Banks also soften their lending standards – they lend more to borrowers with a bad credit history and with high uncertainty. Lower interest rates, by contrast, reduce the credit risk of outstanding loans. Loan credit risk is maximized when both interest rates are very low prior to loan origination and interest rates are very high over the life of the loan. Our results suggest that low interest rates increase bank risk-taking, reduce credit risk in banks in the very short run but worsen it in the medium run. Risk-taking is not equal for all type of banks: Small banks, banks with fewer lending opportunities, banks with less sophisticated depositors, and savings or cooperative banks take on more extra risk than other banks when interest rates are lower. Higher GDP growth reduces credit risk on both new and outstanding loans, in stark contrast to the differential effects of monetary policy.monetary policy;low interest rates;financial stability;lending standards;credit risk;risk-taking;business cycle;bank organization;duration analysis

Credit Supply versus Demand: Bank and Firm Balance-Sheet Channels in Good and Crisis Times

Abstract: Banking crises involve periods of persistently low credit and economic growth. Banks’ balance sheets are then weak but so are those of non-financial corporate borrowers. Hence, a crucial question is whether credit growth is low due to supply or to demand factors. However convincing identification has been elusive due to a lack of detailed loan application-, bank-, and firm-level data. Access to a dataset of loan applications in Spain that is matched with complete bank and firm balance-sheet data covering the period from 2002 to 2010 allows us to identify bank and firm balancesheet channels. We find robust evidence showing that bank balance-sheet strength determines the success of loan applications and the granting of loans in crisis times. The heterogeneity in firm balance-sheet strength determines loan granting in both good and crisis times, although the potency of this firm balance-sheet channel is the largest in the latter period. Our findings therefore hold important implications for both theory and policy.bank lending channel;credit supply;business cycle;credit crunch;capital;liquidity

PAMPs, MAMPs, DAMPs and others: an update on the diversity of plant immunity elicitors

Plants possess a broad array of defenses that could be actively expressed in response of pathogenic organisms or parasites but also following beneficial saprophytic microorganisms recognition. Specifically, there are compounds derived from these organisms and called elicitors that are perceived by the plant to induce a locally or systemically expressed resistance. The understanding of the physiological and biological basis of these induced immunity mechanisms have greatly advanced over the past years but a deeper investigation of the mechanisms underlying the perception of elicitors is essential to develop novel strategies for pest control. The application of chemical and biological stimulators of plant immune defenses in conventional agriculture is expected to increase within the next years. Because of their organic origin and as they provide means for conferring plant protection in a non-transgenic manner, elicitors of plant immunity have a huge potential as biocontrol products. Through this review, we want to illustrate the diversity of compounds identified as stimulators of the plant immune system and describe the mechanisms by which they could be recognized at the plasma membrane level

Hazardous Times for Monetary Policy:What do Twenty-three Million Bank Loans Say about the Effects of Monetary Policy on Credit Risk?

We investigate the impact of the stance and path of monetary policy on the level of credit risk of individual bank loans and on lending standards. We employ the Credit Register of the Bank of Spain that contains detailed monthly information on virtually all loans granted by all credit institutions operating in Spain during the last twenty-two years – generating almost twenty-three million bank loan records in total. Spanish monetary conditions were exogenously determined during the entire sample period. Using a variety of duration models we find that lower short-term interest rates prior to loan origination result in banks granting more risky new loans. Banks also soften their lending standards – they lend more to borrowers with a bad credit history and with high uncertainty. Lower interest rates, by contrast, reduce the credit risk of outstanding loans. Loan credit risk is maximized when both interest rates are very low prior to loan origination and interest rates are very high over the life of the loan. Our results suggest that low interest rates increase bank risk-taking, reduce credit risk in banks in the very short run but worsen it in the medium run. Risk-taking is not equal for all type of banks: Small banks, banks with fewer lending opportunities, banks with less sophisticated depositors, and savings or cooperative banks take on more extra risk than other banks when interest rates are lower. Higher GDP growth reduces credit risk on both new and outstanding loans, in stark contrast to the differential effects of monetary policy.

Designing online audiovisual heritage services: an empirical study of two comparable online video services

The purpose of this study is to seek input for a new online audiovisual heritage service. In doing so, we assess comparable online video services to gain insights into the motivations and perceptual innovation characteristics of the video services. The research is based on data from a Dutch survey held among 1,939 online video service users. The results show that online video service held overlapping antecedents but does show differences in motivations and in perceived innovation characteristics. Hence, in general, one can state that in comparison, online video services comply with different needs and have differences in perceived innovation characteristics. This implies that one can design online video services for different needs. In addition to scientific implications, the outcomes also provide guidance for practitioners in implementing new online video service

Credit Supply versus Demand:Bank and Firm Balance-Sheet Channels in Good and Crisis Times

Abstract: Banking crises involve periods of persistently low credit and economic growth. Banks’ balance sheets are then weak but so are those of non-financial corporate borrowers. Hence, a crucial question is whether credit growth is low due to supply or to demand factors. However convincing identification has been elusive due to a lack of detailed loan application-, bank-, and firm-level data. Access to a dataset of loan applications in Spain that is matched with complete bank and firm balance-sheet data covering the period from 2002 to 2010 allows us to identify bank and firm balancesheet channels. We find robust evidence showing that bank balance-sheet strength determines the success of loan applications and the granting of loans in crisis times. The heterogeneity in firm balance-sheet strength determines loan granting in both good and crisis times, although the potency of this firm balance-sheet channel is the largest in the latter period. Our findings therefore hold important implications for both theory and policy.