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The impact of conventional and unconventional monetary policies on loan default risk—Evidence from UK peer‐to‐peer lending platforms

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  • Anh Nguyet Vu

Abstract

This study investigates the effect of both conventional and unconventional monetary policies on loan default of UK personal and business peer‐to‐peer (P2P) loans. I employ loan book data of Zopa, Lending Works, and MarketFinance, which are three of the most popular UK P2P lending platforms. Survival analysis reveals consistent evidence for the existence of the risk‐taking channel of monetary policy. Monetary easing, be it conventional or unconventional, reduces loan survival in the P2P lending market. This finding delivers useful information for policymakers to rebalance the countervailing effects of expansionary monetary policies on financial stability during the era of alternative financing.

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  • Anh Nguyet Vu, 2025. "The impact of conventional and unconventional monetary policies on loan default risk—Evidence from UK peer‐to‐peer lending platforms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 242-260, January.
    • Handle: RePEc:wly:ijfiec:v:30:y:2025:i:1:p:242-260
    DOI: 10.1002/ijfe.2921
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