The countercyclical capital buffer and the composition of bank lending

Raphael Auer, Alexandra Matyunina and Steven Ongena
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Alexandra Matyunina: University of Zurich; Swiss Finance Institute

No 21-66, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Do targeted macroprudential measures impact non-targeted sectors too? We answer this question by investigating the compositional changes in the supply of credit by Swiss banks, exploiting their differential exposure to the activation in 2013 of the countercyclical capital buffer (CCyB) which targeted banks’ exposure to residential mortgages. We find that the additional capital requirements stemming from the activation of the CCyB causes higher growth in banks’ commercial lending. While banks lend more to all categories of firms, including larger corporate borrowers in the syndicated loan market, smaller and riskier firms are the primary beneficiaries of the new macroprudential measure. However, the interest rates and other costs of obtaining credit for these firms increase as well.

Keywords: macroprudential policy; spillovers; credit; bank capital; systemic risk; syndicated loan market (search for similar items in EconPapers)
JEL-codes: E51 E58 E60 G01 G21 G28 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2021-09
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-fdg, nep-isf, nep-mac and nep-rmg
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Related works:
Journal Article: The countercyclical capital buffer and the composition of bank lending (2022)
Working Paper: The Countercyclical Capital Buffer and the Composition of Bank Lending (2019)
Working Paper: The countercyclical capital buffer and the composition of bank lending (2019)
Working Paper: The countercyclical capital buffer and the composition of bank lending (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2166

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