The Micro Impact of Macroprudential Policies: Firm-Level Evidence

Abstract:»Combining balance sheet data on 900,000 firms from 49 countries with
information on the adoption of macroprudential policies during
2003-2011, we find that these policies are associated with lower
credit growth. These effects are especially significant for micro,
small and medium enterprises (MSMEs) and young firms that, according
to the literature, are more financially constrained and bank
dependent. Among MSMEs and young firms, those with weaker balance
sheets exhibit lower credit growth in conjunction with the adoption of
macroprudential policies, suggesting that these policies can enhance
financial stability. Finally, our results show that macroprudential
policies have real effects, as they are associated with lower
investment and sales growth.»