Credit lines help firms absorb tariff shocks – BIS bulletin
Banks can stabilise economy during crises by offering on-demand liquidity, researchers say
Credit lines offered by banks can help firms address the unpredictable liquidity needs arising from tariffs, researchers at the Bank for International Settlements have argued.
In a bulletin published on June 4, the authors – Ryan Niladri Banerjee, Jon Frost, Michael Chui and Jose María Vidal Pastor – note that banks can create money when needed by offering overdraft facilities and credit lines to businesses.
They add that firms’ need for these types of on-demand liquidity is growing as significant
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