Abstract
AbstractDirect lenders, nonbank credit intermediaries with low leverage, have become increasingly important players in corporate loan markets. In this paper, we investigate the role they play in the monetary policy transmission mechanism, using U.S. dollar syndicated loan data covering the 1997–2018 period. We show that direct lenders are more likely to join loan syndicates whenever monetary policy announcements trigger a contraction in borrowers' net worth irrespective of the directional change in interest rates. Thus, our findings suggest that direct lenders dampen the financial accelerator channel of monetary policy.
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