Bruno Albuquerque

We study how banking crises reshape nonbank financial institutions' (NBFIs) role in corporate debt markets using primary-market syndicated loans and corporate bonds over 1990-2025. We find that NBFI cyclicality is function-specific: NBFIs contract syndicated loans relative to banks but expand corporate bond underwriting, especially through bank-affiliated NBFIs. Firms with stronger pre-crisis NBFI underwriting relationships are more likely to switch from loans to bonds, raise more bond financing, experience smaller declines in total borrowing, and exhibit stronger crisis outcomes. This reconciles competing views of nonbank cyclicality: NBFIs may amplify stress as loan-market risk bearers while preserving market access as bond underwriters.

We study how banking crises reshape nonbank financial institutions’ (NBFIs) role in corporate debt markets using primary-market syndicated loans and corporate bonds over 1990–2025. We find that NBFI cyclicality is function-specific: NBFIs contract syndicated loans relative to banks but expand corporate bond underwriting, especially through bank-affiliated NBFIs. Firms with stronger pre-crisis NBFI underwriting relationships are more likely to switch from loans to bonds, raise more bond financing, experience smaller declines in total borrowing, and exhibit stronger crisis outcomes. This reconciles competing views of nonbank cyclicality: NBFIs may amplify stress as loan-market risk bearers while preserving market access as bond underwriters.

We study how banking groups adjust corporate credit supply in response to tighter macroprudential policies. Using granular data on syndicated corporate loans, we show that banking groups reallocate lending from bank subsidiaries toward affiliated nonbank financial institutions (NBFIs) following regulatory tightening. Relative to bank subsidiaries within the same group, NBFI subsidiaries expand lending, and their credit supply also increases in absolute terms. We estimate that by "banking on" their nonbanks, banking groups offset, on average, more than half of the contraction in bank lending induced by macroprudential tightening. Our findings highlight an important intra-group reallocation channel through which banking groups can partially offset regulatory constraints and result in greater bank-nonbank interconnectedness.

This paper estimates the interest rate pass-through in Cabo Verde. Using monthly data since 2001, we estimate a limited pass-through of monetary policy to banks’ lending rates: a 1-percentage-point policy rate change leads to a 0.19–0.28 increase in average lending rates and 0.13–0.23 in long-term rates. Pass-through is roughly twice as strong during tightening than easing cycles but remains weak overall, including in the current cycle started in May 2023, underscoring challenges for monetary policy transmission.

We study how banking groups adjust corporate credit supply in response to tighter macroprudential policies. Using granular data on syndicated corporate loans, we show that banking groups reallocate lending from bank subsidiaries toward affiliated nonbank financial institutions (NBFIs) following regulatory tightening. Relative to bank subsidiaries within the same group, NBFI subsidiaries expand lending, and their credit supply also increases in absolute terms. We estimate that by ‘banking on’ their nonbanks, banking groups offset, on average, more than half of the contraction in bank lending induced by macroprudential tightening. Our findings highlight an important intra-group reallocation channel through which banking groups can partially offset regulatory constraints and result in greater bank–nonbank interconnectedness.

We identify a new channel in the monetary policy transmission to nonfinancial corporates—the zombie lending channel. Our findings show that unviable and unproductive zombie firms are less affected by contractionary monetary policy relative to other firms because of a more muted tightening in credit conditions. We rationalize this result with a strengthening in evergreening motives when interest rates rise: lenders face incentives to extend loans to zombies to prevent them from defaulting. Strengthening banks’ balance sheets and curbing risky lending behavior could help mitigate zombie lending practices when financial conditions tighten. This paper was accepted by Tomasz Piskorski, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.07315 .

The growing role of nonbanks in corporate credit intermediation raises important but underexplored questions about how both monetary policy (MP) and macroprudential policies (MaPP) affect lending and the real economy. Using syndicated loan data, we examine the joint impact of MP and MaPP shocks on credit supply to nonfinancial firms. Our findings show that nonbanks act as shock absorbers, cushioning firms—particularly those with existing nonbank relationships—from policy tightening. We also find that these shocks drive credit away from weaker banks toward nonbanks, raising concerns about credit quality. Finally, we provide evidence that MaPPs on banks can lead them, especially weaker banks, to shift lending to nonbanks and away from nonfinancial corporations. This allows nonbanks to expand their role in corporate credit markets. Overall, our findings highlight that tighter MP and MaPP may unintentionally push credit intermediation into a sector largely outside the regulatory perimeter, posing new financial stability risks.

"Volume 2025 (2025): Issue 050 (Feb 2025): Not all Housing Cycles are Created Equal: Macroeconomic Consequences of Housing Booms" published on 28 Feb 2025 by International Monetary Fund.

"Departmental Papers" published on by International Monetary Fund.