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DTSTART:20241027T030000
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UID:calendar.135294.field_date.0@www.tse-fr.eu
DTSTAMP:20260712T022234Z
CREATED:20240710T131001Z
DESCRIPTION:Matteo Benetton (University of California\, Berkeley)\, “Revolv
 ing Credit to SMEs: The Role of Business Credit Cards”\, Finance Seminar\,
  Toulouse: TSE\, March 31\, 2025\, 11:00–12:30\, room Auditorium 3 TBC.\n
 \nSmall businesses in the US are frequently excluded from borrowing throug
 h traditional term loans or lines of credit and rely instead on highly sta
 ndardized\, high-interest rate business credit cards to meet their financi
 ng needs. Are rates high because this credit is costly to provide or becau
 se lenders charge high markups? We document that average credit card utili
 zation is almost 30% and is higher for firms facing significant cashflow v
 olatility. While the unconditional\ndelinquency rate is low\, it is strong
 ly correlated with utilization\, potentially making cards expensive to pro
 vide because borrowers make interest-generating draws when they are least 
 able to repay. We develop and estimate a structural model of firms’ card d
 emand\, utilization\, and default choice\, accounting for imperfect compet
 ition and the correlation between utilization and default. We find that wh
 ile the correlation between utilization and delinquency leads to modestly 
 higher rates\, they are primarily explained by markups rather than lender 
 costs\, making business card provision highly profitable. In counterfactua
 l analyses we show that under systematic stress\nscenarios\, absent large 
 shocks to lender funding costs\, lender profits tend to rise in times of b
 orrower stress\, as higher revenue from utilization more than offsets incr
 eases in delinquency. Finally\, we evaluate proposed capital regulations t
 hat add a portion of undrawn credit limits to bank risk-weighted assets. S
 uch rules reduce bank credit provision and push some lending outside the r
 egulated banking sector\, while modestly reducing firm surplus. Because cr
 edit card lending tends to be more profitable in times of stress\, such re
 gulations may be counterproductive for bank stability.
DTSTART;TZID=Europe/Paris:20250331T120000
DTEND;TZID=Europe/Paris:20250331T133000
LAST-MODIFIED:20260113T095129Z
LOCATION:Toulouse: TSE\, March 31\, 2025\, 11:00–12:30\, room Auditorium 3 
 TBC
SUMMARY:Finance Seminar
URL;TYPE=URI:https://www.tse-fr.eu/seminars/2025-revolving-credit-smes-role
 -business-credit-cards
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