Purpose

This paper examines the effects of limiting the number of loans a bank can issue, reflecting a policy recently implemented by the US Federal Reserve.

Design/methodology/approach

This paper does so in a streamlined model of the banking sector.

Findings

This paper finds that a binding limit on loans can enhance welfare by motivating the bank to reduce the number of socially unproductive loans it makes. However, the limit can sometimes reduce welfare by inducing a reduction in the number of socially productive loans the bank issues, the quality of the bank’s loan portfolio, and/or the accuracy with which the bank screens loan opportunities.

Practical implications

The research demonstrates that limits on the loans a bank issues can have subtle and unintended consequences. Consequently, careful thought is warranted before such limits are imposed.

Originality/value

To our knowledge, the existing literature does not provide guidance on the merits of such loan restrictions.

中文翻译：

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限制银行贷款的福利效应

目的

本文研究了限制银行可以发放的贷款数量的影响，反映了美国联邦储备委员会最近实施的一项政策。

设计/方法/方法

本文在银行业的简化模型中这样做。

发现

本文发现，对贷款有约束力的限制可以通过激励银行减少其发放的社会非生产性贷款的数量来提高福利。然而，该限额有时会导致银行发放的社会生产性贷款数量、银行贷款组合的质量和/或银行筛选贷款机会的准确性减少，从而降低福利。

实际影响

研究表明，限制银行发行的贷款可能会产生微妙和意想不到的后果。因此，在施加此类限制之前需要仔细考虑。

原创性/价值

据我们所知，现有文献并未就此类贷款限制的优点提供指导。