WORKING PAPERS

• From Banks to Nonbanks: Macroprudential and Monetary Policy Effects on Corporate Lending

Albuquerque, B., Cerutti, E., Chen, N. and Firat, M. (2025), IMF Working Paper WP/25/96, Washington, D.C, International Monetary Fund. R&R at the American Economic Journal: Macroeconomics. 

> Latest version

> Summary: VoxEU | G20 Global Financial Stability Conference

> Media Coverage: Devdiscourse 

The growing role of nonbanks in corporate credit intermediation raises important yet underexplored questions about the transmission of monetary policy (MP) and macroprudential policy (MaPP) to the real economy. Using syndicated loan data, we examine the impact of both MP and MaPP shocks on credit supply to nonfinancial firms. We show that nonbanks act as shock absorbers, cushioning firms—particularly those with preexisting nonbank relationships—from policy tightening. These shocks drive credit away from weaker banks toward nonbanks, raising concerns about credit quality. We also provide evidence that MaPPs on banks can lead them, especially weaker ones, to shift lending to nonbanks and away from nonfinancial corporations. This allows nonbanks to expand their footprint in corporate credit markets. Our findings highlight that the side effects of tighter MP and MaPP are non-trivial as credit intermediation migrates to a sector largely outside the regulatory perimeter, posing new financial stability risks.

• Banking on nonbanks

Albuquerque, B., Cerutti, E., Firat, M. and Kagerer, B. (2026), coming soon!

We document and analyze a novel regulatory-arbitrage channel—increasing lending via nonbank financial institutions (NBFI) subsidiaries—through which their parent banks mitigate the contractionary effects of tighter macroprudential policies on corporate credit. We show that banking groups expand credit supply in the syndicated corporate loan market through their NBFI affiliates, both relative to bank subsidiaries within the same group and in absolute terms, as a response to tighter banking regulation. We estimate that by "banking on" their nonbanks, banking groups offset more than half of the adverse impact of macroprudential tightening on group-level credit growth. Taken together, our findings indicate that NBFI subsidiaries allow banking groups to partially circumvent regulatory constraints, but at the cost of greater bank–nonbank interconnectedness and potentially heightened systemic risk.

WORK IN PROGRESS

• Bonding through crisis: the role of nonbanks

Albuquerque, B., Becker, J. and Firat, M. (work in progress).