挤出市场与银行业危机

Crowding Out and Banking Crises Pablo Hernando-Kaminsky International Finance CorporationJune 2025 Policy Research Working Paper11145 Abstract This paper studies the effect of government issuance onfirm issuance during banking crises using transaction-levelbond and loan data from 66 countries between 1991 and2017. Governments rarely issue loans, preferring to issuein bond markets. In contrast, firms receive most of theirfinancing from banks. During banking crises, as the supplyof domestic loans decreases, firms switch to issuing bonds indomestic markets. The paper uses a novel instrument basedon maturing debt to overcome the potential endogeneityof government issuance. The findings show that firms must compete with the government for funds in the domesticbond market and are crowded out from this market as aresult. This happens not only in developing countries, but inadvanced countries as well. The paper also shows that firmswith the ability to tap international debt markets switchto these markets when crowding out occurs in domesticbond markets. Lastly, the paper shows that more developeddomestic bond markets mitigate, but do not eliminate, thedegree to which crowding out occurs. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Crowding Out and Banking Crises∗ Pablo Hernando-Kaminsky† Latestversion:Clickhere Keywords:crowding out, banking crises, debt market switching, development of debt marketsJEL Classifications: E44, E51, F30, F32, F34, G01, G10, G30, H63 ∗I am grateful to Carlos Vegh and Alessandro Rebucci for their guidance and ongoing support.I also thankTomas Williams, Andreea Rot˘arescu, Graciela Kaminsky, Laurence Ball, Michele Dathan, and No´emie Pinardon-Touati for their insightful comments, as well as participants in the JHU macroeconomics and IFC Research seminarsfor useful feedback.† Address:International Finance Corporation, Economics and Market Research Department, 2121 PennsylvaniaAvenue, Washington, DC 20433, USA.E-mail:pablohk@ifc.org.Web:pablohernandokaminsky.com 1Introduction Global government debt has grown to record high levels over the past decade, beginning withthe Global Financial Crisis in 2008 and culminating in a spike in 2020 with the onset of theCOVID-19 pandemic (Kose et al. (2022)). More broadly, Figure 1a shows that government debtissuance surges at the start of banking crises and continues to rise as the crisis unfolds.1 Duringbanking crises, as the financial system deteriorates, credit availability evaporates, making accessto financing much more challenging and exacerbating the crisis. Since governments increase theirborrowing during these periods to both stabilize the banking system and support the economy,it is important to understand the extent to which firms are crowded out of debt markets by thegovernment. This paper studies the effect of government issuance on firm issuance during banking crisesand finds that firms are crowded out of the domestic bond market during banking crises, both inadvanced and developing countries.To establish this new fact, I construct a new dataset basedon transaction-level bond and loan data combined with firm balance sheet characteristics from 66advanced and developing countries for the 1991-2017 period. This dataset allows me to examinewhether crowding out occurs in four distinct markets — the domestic bond market, the domesticloan market, the international bond market, and the international loan market — while controllingfor firm characteristics that affect firm demand for credit.To identify this crowding out effect,I use maturing sovereign debt as a novel instrument for government issuance.I find that a onestandard deviation increase in government issuance (as a percentage of trend GDP) decreases firmissuance (as a percentage of assets) by 1.26 percentage points during banking crises. This effectis substantial, implying that government issuance reduces firm issuance by approximately 41%relative to non-crisis periods. Since the early 1990s, there have been numerous banking crises. These periods were associatedwith sizable government debt issuance as governments sought to stabilize the banking systemthrough bank bailouts.The surge in government borrowing during these periods is dramatic.Government issuance (as a percentage of trend GDP) increases by approximately 8% at the onsetof a banking crisis