The impact of G-SIB identification on bank lending: evidence from syndicated loans

Markus Behn and Alexander Schramm

No 2479, Working Paper Series from European Central Bank

Abstract: This paper uses granular data on syndicated loans to analyse the impact of international reforms for Global Systemically Important Banks (G-SIBs) on bank lending behaviour. Using a difference-in-differences estimation strategy, we find no effect of the reforms on overall credit supply, while at the same time documenting a substantial decline in borrower- and loan-specific risk factors for the affected banks. Moreover, we detect a significant decline in the pricing gap between interest rates charged by G-SIBs and other banks, which we interpret as indirect evidence for a reduction in funding cost subsidies. Overall, our results suggest that the G-SIB reforms have helped to mitigate moral hazard problems associated with systemically important banks, while the consequences for the real economy have been limited. JEL Classification: G20, G21, G28

Keywords: bank lending; bank regulation; systemically important banks (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-ban
Note: 2203070
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20202479

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