Does Borrowing from the Private Markets Cost More Than Borrowing From The Public Markets?

prof. dr. Philip Joos

Full Professor

TiSEM: Tilburg School of Economics and Management
TiSEM: Department Accountancy

Pascal Böni PhD

Associate Professor of Finance

TiSEM: Tilburg School of Economics and Management
TiSEM: Department Finance

prof. dr. Frans de Roon

Full Professor

TiSEM: Tilburg School of Economics and Management
TiSEM: Department Finance

Date Written: August 23, 2020

Nonbank corporate lending climbs to a new record high. Amid the COVID-19 crisis, nonbank corporate lending experienced another spike in growth. In the US, nonbank lending now amounts to almost 50% in relation to GDP, the same ratio for bank lending resting at a stagnating average 11% for decades. The primary source of debt for firms is thus progressively provided outside the banking system.

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