Date of Award

Winter 2013

Document Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration-Finance

Committee Director

Mohammad Najand

Committee Director

John Griffith

Committee Member

David Selover


This dissertation calls upon the theory of financial intermediation (Diamond and Dybvig, 1983) and the credit channel theory of monetary policy effectiveness (Bernanke and Gertler, 1995) to show how commercial banks responded to the trillions of dollars of innovations to stimulate the credit markets during the 2008 global financial crisis. Specifically, loan-level data is used to conduct univariate, regression, and event-study analyses to address the research question of, "Did United States- and European Union-based commercial banks respond to credit stimuli with increased commercial lending during the stimulus period of October 1, 2007 through September 30, 2011 when compared to the non-stimulus period of October 1, 2002 through September 30, 2006 five years prior?".

The univariate analysis reveals similar results for each region. In the United States (U.S.), the data of 1,977 commercial loans to publicly traded companies in the stimulus period and 1,844 loans in the non-stimulus period, as issued by 25 U.S.-based commercial banks, represent an increase of $236 billion. Such loan-level univariate analysis on 754 commercial loans to publicly traded companies in the stimulus period and 698 commercial loans in the non-stimulus period issued by nine commercial banks based in the European Union (EU) countries of France, Germany, and the United Kingdom (EU3) reflect an increase of $18 billion. Commercial lending was up.

The regression analysis provides different results in each region. In the U.S., the regressions show significant impact of the credit stimuli on the increase in commercial lending for five of the six credit stimuli studied. However, in the EU3 countries, the regression analysis reports a lack of significance in eight of the nine stimuli studied, which infers that the increase in commercial lending is not in response to the credit stimuli. Differences of approach in the provision of stimuli could explain these results.

This research contributes new findings to the financial literature. Commercial lending increased in both the U.S. and the EU3 countries. In addition, the U.S. shows significant influence of credit stimuli on the increase in lending. It appears that the U.S.-based commercial banks responded positively to the credit stimuli.


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