Sectoral Macroprudential Policy and the Sectoral Allocation of Bank Credit

Abstract Book of the 11th International Conference on Management, Economics and Finance

Year: 2026

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Sectoral Macroprudential Policy and the Sectoral Allocation of Bank Credit

Dr. Julian Gabriel Soriano-Harris

ABSTRACT:

Anovel dataset for 72 countries has been constructed, containing bank credit disaggregated by borrowing sector. I show that household-targeted macroprudential policy not only reduces credit to households but also, via spillover effects, increases credit to firms. By virtue of these effects,
the share of corporate credit in banks’ loan portfolios increases. The results are mainly driven by borrower-based household-targeted macroprudential policy tools, as opposed to lender-based tools. In order to assess if the new sectoral allocation of bank credit following household-targeted macroprudential policy is beneficial for the economy, I study the nonperforming loans to total loans ratio and the unemployment rate. While the evidence on lender-based tools is mixed,
household-targeted borrower-based macroprudential tools are associated with reductions in the nonperforming loans ratio in the sample of advanced economies and with reductions in the unemployment rate in the sample of emerging and developing economies.

Keywords: Macroprudential Policy, Credit to firms, Credit to Households