Template-Type: ReDIF-Paper 1.0
Author-Name: Fiorella De Fiore
Author-X-Name-First: Fiorella
Author-X-Name-Last: De Fiore
Author-Name: Leonardo Gambacorta
Author-X-Name-First: Leonardo
Author-X-Name-Last: Gambacorta
Author-Name: Cristina Manea
Author-X-Name-First: Cristina
Author-X-Name-Last: Manea
Title: Big techs and the credit channel of monetary policy
Abstract: We document some stylized facts on big tech credit and rationalize them through the lens of a model where big techs facilitate matching on the e-commerce platform and extend loans. The big tech reinforces credit repayment with the threat of exclusion from the platform, while bank credit is secured against collateral. Our model suggests that: (i) a rise in big techs' matching efficiency increases the value for firms of trading on the platform and the availability of big tech credit; (ii) big tech credit mitigates the initial response of output to a monetary shock, while increasing its persistence; (iii) the efficiency gains generated by big techs are limited by the distortionary fees collected from users.
Creation-Date: 2023-04
File-URL: https://www.bis.org/publ/work1088.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1088.htm
File-Format: text/html
Number: 1088
Keywords: Big Techs, monetary policy, credit frictions
Classification-JEL: E44, E51, E52, G21, G23
Handle: RePEc:bis:biswps:1088