Liu Chunbo:FinTech Credit, Information Spillover and the Riskiness of Bank Loans

Time:1224,2021View:96


Time: December 23, 2021 (Thursday) 1:30-3:00 p.m.

Venue: Songjiang Campus 2235

Speaker: Liu Chunbo, Associate Professor, Institute of Finance, Southwest University of Finance and Economics

Host: Professor Zhang Jian

TopicFinTech Credit, Information Spillover and the Riskiness of Bank Loans


Abstract

The expansion of FinTech credit could generate new information that helps with banks’ borrower screening. However, the potential migration of good borrowers to FinTech lenders could lead to adverse selection in the bank loan market. We exploit an exogenous entry of Alibaba Micro-Credit Program in 2012 that extends credit only to corporate borrowers in a specific loan market segment. Using difference-in-difference analysis, we show that the bank loan segment exposed to FinTech penetration experiences a significant decline in default rate after the FinTech entry. Consistent with the information spillover hypothesis, the decline in default risk is more pronounced for borrowers for which the FinTech lender has more information advantage. Moreover, we find that banks lower the collateral requirement and increase credit supply in response to FinTech penetration. Our findings suggest that the information spillover from informationally advantageous FinTech lenders expands the bank loan market

Guest Speaker

Chunbo Liu is an associate professor at the Institute of Finance, Southwest University of Finance and Economics. He graduated from Norwegian School of Economics in 2016 with a PhD. His research areas include corporate finance, bank credit, financial technology, and capital markets. His research results have been published in international academic journals such as Journal of Management Accounting Research, Journal of Futures Markets, etc. His academic papers have been accepted by international academic conferences such as NFA, CICF, FMA, etc.


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