Weathering the Storm: Who Can Access Credit in a Pandemic?

Chodorow-Reich, Gabriel; Darmouni, Olivier M.; Harry, Cooperman; Luck, Stephan; Plosser, Matthew

Discussion Paper

Weathering the Storm: Who Can Access Credit in a Pandemic?

Abstract: Credit enables firms to weather temporary disruptions in their business that may impair their cash flow and limit their ability to meet commitments to suppliers and employees. The onset of the COVID recession sparked a massive increase in bank credit, largely driven by firms drawing on pre-committed credit lines. In this post, which is based on a recent Staff Report, we investigate which firms were able to tap into bank credit to help sustain their business over the ensuing downturn.

Keywords: liquidity provision; macro-finance; credit; financial constraints; loan terms; banking; credit lines; COVID-19;

JEL Classification: G2; G3;