Basel III and Bank-Lending: Evidence from the United States and Europe
Sami Ben Naceur (),
Jérémy Pépy and
No 17/245, IMF Working Papers from International Monetary Fund
Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. Capital ratios have significant, negative impacts on bank-retail-and-other-lending-growth for large European banks in the context of deleveraging and the “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending-growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies.
Keywords: Basel Core Principles; Bank regulations; Loans; Commercial banks; Liquidity management; Financial crisis; United States; Europe; Financial crises; Bank credit; Financial markets; Bank rates; Deposit insurance; lending supply,bank regulatory capital,liquidity requirements,banking regulation,Government Policy and Regulation,stable fund,capital ratio,risk-weighted,U.S. bank,available amount (search for similar items in EconPapers)
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Journal Article: Basel III and bank-lending: Evidence from the United States and Europe (2018)
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