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The Countercyclical Capital Buffer and the Composition of Bank Lending

Raphael Auer and Steven Ongena

No 7815, CESifo Working Paper Series from CESifo Group Munich

Abstract: Do macroprudential regulations on residential lending influence commercial lending behavior too? To answer this question, we identify the compositional changes in banks’ supply of credit using the variation in their holdings of residential mortgages on which extra capital requirements were uniformly imposed by the countercyclical capital buffer (CCyB) introduced in Switzerland in 2012. We find that the CCyB’s introduction led to higher growth in commercial lending although this was unrelated to conditions in regional housing markets. Interest rates and fees charged to the firms concurrently increased. We rationalize these findings in a model featuring both private and firm-specific collateral.

Keywords: macroprudential policy; spillovers; credit; bank capital; systemic risk (search for similar items in EconPapers)
JEL-codes: E51 E58 E60 G01 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cfn, nep-mac, nep-rmg and nep-ure
Date: 2019
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Related works:
Working Paper: The countercyclical capital buffer and the composition of bank lending (2019) Downloads
Working Paper: The countercyclical capital buffer and the composition of bank lending (2016) Downloads
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