International bank credit, nonbank lenders, and access to external financing

Jose Maria Serena Garralda, Marina-Eliza Spaliara and Serafeim Tsoukas

Working Papers from Business School - Economics, University of Glasgow

Abstract: Using a cross-country firm-bank dataset, we examine how an unexpected increase in bank capital requirements by the European Banking Authority (EBA) affects firms' financial choices. Our results first suggest that the regulatory shock implies a reduction in the supply of bank credit, with US firms affected the most. Yet, following the capital exercise, US firms are able to tap into the public bond markets and secure credit lines from nonbank financial institutions. This has implications for their capital structure and their real outcomes. These results suggest that diversified domestic loan markets, in which banks and nonbank financial institutions lend to corporations, can help overcome reductions in cross-border bank funding.

Keywords: International bank credit; nonbank lenders; external financing (search for similar items in EconPapers)
JEL-codes: D22 E22 F32 G32 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-cwa, nep-fdg and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: International bank credit, nonbank lenders, and access to external financing (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2022_04

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