This paper studies how changes in household credit affect small business lending. First, we build a closed economy model that examines two opposing channels: a negative crowding out effect and a positive collateral effect. Our analysis shows that, following a household credit expansion, the...

The disproportionate increase of bank lending to households relative to businesses is a central trend in the financial sector of many countries. In this paper, we provide evidence that credit information sharing has strongly contributed to this trend. Specifically, using a sample of 25 European...