Nonbanks, Banks, and Monetary Policy: U.S. Loan-Level Evidence since the 1990s

We show that nonbanks (funds, shadow banks, fintech) reduce the effectiveness of tighter monetary policy on credit supply and resulting real effects, increase risk-taking. For identification, we exploit exhaustive US loan-level data since 1990s Gertler-Karadi shocks. Higher rates shift from banks to less-regulated, more fragile nonbanks. The bank-to-nonbank largely neutralizes total associated consumption effects for consumer loans attenuates response corporate (firm investment) mortgages (house price spillovers). Moreover, different so-called risktaking channel, higher imply risk-taking by