Macroprudential regulation and bank risk: The role of shareholders' and creditors' rights

Tiago Matos, João C.A. Teixeira and Tiago M. Dutra

Global Finance Journal, 2024, vol. 59, issue C

Abstract: This paper analyzes whether the effect of macroprudential policies on bank risk is channeled through investors' protection using panel data from a sample of 624 banks from 40 countries. We show that investors' protection plays a significant role in the effect of macroprudential policies on bank risk, which translates into higher efficiency for macroprudential policies in countries with highly protected creditors, whereas there is a loss of effectiveness in countries where shareholders are highly protected. We provide further evidence that the impact of loosening a macroprudential policy is asymmetric (and more pronounced) compared with the adoption or tightening of a macroprudential policy.

Keywords: Banks’ risk; Investors’ protection; Macroprudential policies (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 G38 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:59:y:2024:i:c:s1044028323001151

DOI: 10.1016/j.gfj.2023.100920

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