The impact of bank rating changes on lending in major European banks

Oussama Ben Hmiden () and Tanguy Meigné
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Oussama Ben Hmiden: ESSCA School of Management
Tanguy Meigné: King's college

Economics Bulletin, 2018, vol. 38, issue 1, 638-649

Abstract: This study examines the impact of change in bank ratings on the lending behavior of large European banks by comparing a crisis and post-crisis sample. Our findings suggest that, at the outbreak of the crisis, downgraded banks or those with near a plus (+) or minus (-) notch rating granted fewer loans. This behavior is consistent with the financial pressure due to regulatory requirements, such as requests for additional capital that may increase the role of the credit rating agencies in lending decision-making.

Keywords: Bank rating changes; loans; financial crisis; Basel Capital Accord. (search for similar items in EconPapers)
JEL-codes: G2 G3 (search for similar items in EconPapers)
Date: 2018-03-23
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