borrower leverage and in strengthening banks’ resilience to house price shocks. In an application to Romania, Nier et al. (2019 ) use a micro (credit register)-based econometric model to estimate the effect of DSTI policies on PDs. The relationship between DSTIs and the probability of default is found to be non-linear, and consumer loan defaults happen at lower DSTI thresholds compared to mortgages. III. Data and Model Methodology Our methodological framework is built upon microdata from the third wave of the Household Finance and Consumption Survey (HFCS) 9
The monetary transmission mechanism in the euro area has been adversely affected by the recent crises. Using survey data on thousands of euro area firms, we study factors that affect the access to finance of SMEs. We find that changes in bank funding costs and borrower leverage matter for firms’ access to finance. Increases in bank funding costs and borrowers’ debt-to-asset ratios are significantly and negatively associated with firms’ access to finance. The use of subsidies significantly improve access to finance of SMEs. Finally, access to finance is found to be positively related to firm size and firm age.
country and year. Cerutti et al. (2015) classify these as lender-based or borrower-based. Lender-based policies are those aimed at financial institutions’ assets or liabilities and include, for example, loan-loss provisioning practices, leverage, and capital buffers. Borrower-based measures are those aimed at borrowers’ leverage and financial positions, and cover LTV and LTI caps. Limits on foreign currency and domestic currency loans and reserve requirements have been most common in EMEs, whereas leverage ratios and limits on interbank exposures are most