Effects of Bank Capital Requirements on Lending by Banks and Non-Bank Financial Institutions

Peter Bednarek, Olga Briukhova, Steven Ongena and Natalja von Westernhagen
Additional contact information
Peter Bednarek: Deutsche Bundesbank
Olga Briukhova: University of Zurich - Department of Banking and Finance; Swiss Finance Institute
Natalja von Westernhagen: Deutsche Bundesbank

No 25-12, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: What is the impact of a sudden and sizeable increase in bank capital requirements on the lending activity by directly affected banks and by non-affected non-bank financial institutions (NBFIs)? To answer this question, we apply a difference-in-differences methodology around the capital exercise by the European Banking Authority (EBA) in 2011 with German credit register data. We find that insurance companies, financial enterprises, and factoring companies — but not leasing companies or very large NBFIs — and Non-EBA banks expand their corporate lending relative to EBA banks. In particular, NBFIs use the opportunity to expand their credit activities, in riskier and more competitive borrower segments.

Keywords: non-bank financial intermediation; bank capital requirements; EBA capital exercise (search for similar items in EconPapers)
JEL-codes: C33 E50 G21 G23 G28 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2025-01
New Economics Papers: this item is included in nep-eec, nep-mon and nep-rmg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4689715 (application/pdf)

Related works:
Working Paper: Effects of bank capital requirements on lending by banks and non-bank financial institutions (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2512

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().