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on Community banking and credit unions |
| By: | Olena Chyruk; David Cox; Lily Liu; James Z. Wang; Stephen Zoulalian |
| Abstract: | Buy Here Pay Here (BHPH) auto dealers occupy a unique position in the auto market by serving as both the seller and financier of vehicles to their customers. This contrasts with traditional auto dealers, who connect buyers to financing options from third-party banks, credit unions, or auto finance companies, including the captive financing arms of auto manufacturers. |
| Date: | 2026–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:103237 |
| By: | Carlos Carvalho; Bruno Perdigão; Ricardo Schechtman |
| Abstract: | Conditional on a loan application filed by a small or medium enterprise (“SME”), we find that the existence of recent loans of that firm with private domestic banks increases the chance a loan will be granted by a foreign bank relative to a private domestic bank. On the other hand, recent loans extended by foreign banks or by domestic state-owned banks do not produce this differential effect. Furthermore, the forementioned effect vanishes for large firms. These findings are consistent with a mechanism by which foreign banks overcome borrower informational asymmetries by relying on their domestic peers’ recent behavior. Indeed, the higher ability of private domestic banks to access informationally opaque SMEs, dependent on soft information, makes recent loans with them a more valuable signal for foreign lenders who lack the same ability. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:647 |
| By: | Bernhard Reinsberg |
| Abstract: | Since the Global Financial Crisis, money has been undergoing transformational changes. Cryptocurrencies like Bitcoin and the lesser-known stablecoins, powered by blockchain technology, have grown rapidly, allowing people to undertake financial transactions globally without central intermediaries. In addition, many countries have explored central bank digital currencies, which are digital representations of fiat monies controlled by national central banks. While descriptive studies on these money innovations abound, systematic analysis of their drivers is lacking. This paper offers the first systematic analysis of the conditions under which societies adopt these money innovations. Based on an original cross-country dataset capturing the extent to which money innovations have been deployed, regression analysis shows limited overlap in the significant drivers of these money innovations, aside from fundamental country characteristics including level of development, population size, and (to a lesser extent) regime type. Cryptocurrency use appears to be driven by macro-financial instability and lack of access to bank finance. In contrast, CBDC adoption by states appears to be driven by exposure to sanctions and previous experimentation with CBDC projects. While confirming the role of financial inclusion for cryptocurrency adoption, the findings partly challenge the official discourse of financial inclusion as a key motivation for CBDC adoption. |
| Keywords: | Digital money, cryptocurrency, central bank digital currency (CBDC), money innovations, cross-country analysis |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cbr:cbrwps:wpt202601 |
| By: | David P. Glancy |
| Abstract: | Loan modifications can either amplify or mitigate credit losses depending on the strategy lenders employ. Using detailed supervisory data and a model accounting for competing extension motivations (temporary repayment difficulties, foreclosure costs, and loss recognition costs), I assess why banks extend CRE loans. I find that extensions predominantly address temporary payment frictions, both in normal times and following the Spring 2023 bank stress episode. Contrary to banks "extending-and-pretending" during that episode, banks increased income and principal paydown requirements for extensions, contributing to strong ex-post performance for extended loans. |
| Keywords: | nonresidential real estate; loan delinquency; foreclosures; credit risk; commercial lending |
| JEL: | E44 G21 R33 |
| Date: | 2026–05–04 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:103198 |
| By: | Viral V. Acharya; Nicola Cetorelli; Bruce Tuckman |
| Abstract: | Do the recent stresses in the NBFI space—notably the bankruptcies of Tricolor and First Brands, and the decision of Blue Owl Capital Corp II (OBDC II) to end its redemption program and return capital through a wind-down of the fund—create distress for banks? The general sentiment is that the recent stresses are unlikely to amount to systemic concerns, although it does not mean there might not be “some stress and strain” for banks and that policymakers are “watching carefully” for exposure across banks. In a series of previous posts, we showed that shocks to nonbank financial institutions (NBFIs) directly impact banks that have exposures to NBFIs. In this post, we show that bank stocks have been directly impacted by NBFIs yet again. In short, NBFI troubles do result in “stress and strain” for banks. |
| Keywords: | NBFIs; banks; private credit |
| JEL: | G21 G23 |
| Date: | 2026–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:103181 |
| By: | Dulce Lopez Cruz; Teodora Paligorova; Toshihide Yorozu |
| Abstract: | Outstanding mortgage debt in the commercial real estate (CRE) sector totaled $6 trillion at the end of 2024 including owner-occupied and nonowner-occupied real estate, multifamily mortgages, and loans backed by acquisition, development, and construction projects. Banks hold half of all CRE debt, with regional and small institutions (under $100 billion in assets) collectively accounting for a larger share of this lending than their larger counterparts with assets over $100 billion. |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:103192 |