Financial Protectionism? First Evidence

Andrew Rose and Tomasz Wieladek

Journal of Finance, 2014, vol. 69, issue 5, 2127-2149

Abstract: type="main">

We examine large public interventions in the financial sector, such as bank nationalizations and search for “financial protectionism,” a decrease in the quantity and/or an increase in the price of loans that banks from one country make to borrowers resident in another. We use a bank-level panel data set spanning all U.K.-resident banks between 1997Q3 and 2010Q1. After nationalization, foreign banks reduced their fraction of British loans by about 11% and increased their effective interest rates by about 70 basis points. In contrast, nationalized British banks did not significantly change either their loan mix or effective interest rates.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:69:y:2014:i:5:p:2127-2149

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