Small Bank Lending in the Era of Fintech and Shadow Banks: A Sideshow?

Taylor A. Begley, Kandarp Srinivasan

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Amid the emerging dominance of nonbanks, small banks use key financing advantages to persist in the mortgage market. We provide evidence of the heterogeneous impact of two shocks to the supply of mortgage credit: postcrisis regulatory burden and GSE financing cost changes. Small banks exploit regulation disproportionately affecting the largest four banks (Big4) and their ability to lend on balance sheet to strongly substitute for the retreating Big4. The erasure of guarantee fee (g-fee) discounts for large lenders facilitates small bank growth in GSE lending. Small banks also grow balance sheet loans in areas more exposed to g-fee hikes.

Original languageEnglish
Pages (from-to)4948-4984
Number of pages37
JournalReview of Financial Studies
Issue number11
StatePublished - Nov 1 2022

Bibliographical note

Publisher Copyright:
© 2022 The Author(s).

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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