Brexit and the contraction of syndicated lending

Tobias Berg, Anthony Saunders, Larissa Schäfer and Sascha Steffen

Journal of Financial Economics, 2021, vol. 141, issue 1, 66-82

Abstract: We document a 24% decline in loan issuances in the UK syndicated loan market after the Brexit vote relative to a set of comparable loan markets. The decline in lending is driven by a pervasive reduction in demand by UK firms. Changes in GDP forecast around the Brexit vote explain about 61% of the decline in lending. We do not find evidence, however, that the United Kingdom loses its attractiveness as a financial center for cross-border lending. Our results point to the resilience of global financial centers in the face of large unexpected shocks.

Keywords: Brexit; Syndicated loans; Banks; Financial centers (search for similar items in EconPapers)
JEL-codes: G15 G20 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:141:y:2021:i:1:p:66-82

DOI: 10.1016/j.jfineco.2021.03.009

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