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SUMMARY:Dislocated Credit: Captive Lending as Liquidity Management.
DTSTART:20240308T114500
DTEND:20240308T130000
DTSTAMP:20260528T021132Z
UID:914c567f485232a3498223cb0095184972bd33791fa86261205f91ff
CATEGORIES:Conferences - Seminars
DESCRIPTION:Daniel Paravisini - London School of Economics\nA manufacturer
  who also provides loans to its customers can generate liquidity by adjust
 ing credit terms and standards. For example\, approving loans to risky bor
 rowers it would have otherwise rejected\, the manufacturer will boost reve
 nue today at the cost of higher defaults in the future. Using a multi-coun
 try dataset on securitized car loans and quasi-exogenous variation from th
 e Volkswagen emissions scandal\, we show that manufacturers/lenders disloc
 ate credit\nin response to a liquidity shock. Using a calibrated model for
  quantification\, we find that credit dislocations increase the cash colle
 cted up front per vehicle by 16% at a cost lower than available alternativ
 es. Our results imply that the direction\, magnitude\, and heterogeneity o
 f financial shock transmission to consumers is altered when financial inte
 rmediation is internalized by manufacturers.
LOCATION:UniL Campus\, Room Extra 126
STATUS:CONFIRMED
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