Because the Dodd-Frank Act discouraged banks from growing too large and made bank lending harder, private funds and other alternative lenders filled the resulting void by financing small and medium sized businesses that traditional banks no longer served.
Source quote, verbatim
In essence, because the Dodd-Frank Act discouraged banks from getting too big, private funds and other alternative lenders filled the void, providing fi- nancing to the small- and medium-size businesses that traditional banks were no longer equipped to serve.
From
Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016), II.1. Private Fund Industry Trends, p. 19 https://ssrn.com/abstract=2739479 · source PDF
Cite as
Wulf A. Kaal, The Post Dodd-Frank Act Evolution of the Private Fund Industry Comparative Evidence from 2012 and 2 (2016). SSRN: https://ssrn.com/abstract=2739479
Holds when
United States lending markets after Dodd-Frank
small and medium sized business borrowers
Classification
mechanismsupport: arguedfailure: Credit migration outside the banking perimeterfamily: regulatory-arbitragesystemic-riskprivate-fundsdefiregulatory-failure
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