Economics at your fingertips  

International Banking and Cross-border Effects of Regulation: Lessons from Portugal

Diana Bonfim () and Sónia Costa

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: This paper offers a contribution to understand the cross-border effects of bank regulation using data on Portuguese banks. We find that the effect of foreign regulation on domestic credit growth depends on the type of regulation, on the channel of transmission as well as on the legal form of the bank. Our results show that a tightening in foreign regulation leads to a decrease in the growth of domestic credit in the case of concentration ratios and capital requirements and to the opposite effect in the case of sector specific capital buffers and reserve requirements in foreign currencies. We also find significant cross-border effects for the loan-to-value limits. In this case, cross-border spillovers work in different ways for domestic banks with international activity and for foreign banks: after a tightening in this instrument abroad domestic banks decrease credit growth in Portugal while foreign banks increase it. Finally, we show that the cross-border effects of capital requirements work differently through branches and subsidiaries.

JEL-codes: F42 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)

Related works:
Journal Article: International Banking and Cross-Border Effects of Regulation: Lessons from Portugal (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from Banco de Portugal, Economics and Research Department Contact information at EDIRC.
Bibliographic data for series maintained by DEE-NTD ().

Page updated 2019-03-24
Handle: RePEc:ptu:wpaper:w201705