Freeze! Financial Sanctions and Bank Responses

Matthias Efing, Stefan Goldbach, Volker Nitsch and Manju Puri

The Review of Financial Studies, 2023, vol. 36, issue 11, 4417-4459

Abstract: Using regulatory data, we study German bank lending in countries targeted by financial sanctions. We find that domestic banks in Germany reduce lending in sanctioned countries, whereas their foreign bank affiliates outside Germany increase lending. In some cases, this is because the bank affiliates’ host countries have not imposed sanctions themselves. However, even German bank affiliates in host countries that enact sanctions like Germany increase lending if these host countries lack strong institutions and anticrime policies. These findings suggest that even universally adopted sanctions distort bank capital flows and competition if the level of their enforcement varies across bank locations.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

JEL-codes: F51 G18 G28 K3 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Freeze! Financial Sanctions and Bank Responses (2023)
Working Paper: Freeze! Financial sanctions and bank responses (2019)
Working Paper: Freeze! Financial Sanctions and Bank Responses (2018)
Working Paper: Freeze! Financial sanctions and bank responses (2018)
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