Bank response to higher capital requirements : evidence from a quasi-natural experiment / Reint E. Gropp, Thomas Mosk, Steven Ongena, Carlo Wix
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Discovery
874406994
URN
urn:nbn:de:gbv:3:2-66832
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH), December 2016
Umfang
1 Online-Ressource (III, 58 Seiten, 0,75 MB) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
We study the impact of higher capital requirements on banks' balance sheets and its transmission to the real economy. The 2011 EBA capital exercise provides an almost ideal quasi-natural experiment, which allows us to identify the effect of higher capital requirements using a difference-in-differences matching estimator. We find that treated banks increase their capital ratios not by raising their levels of equity, but by reducing their credit supply. We also show that this reduction in credit supply results in lower firm-, investment-, and sales growth for firms which obtain a larger share of their bank credit from the treated banks.
Schriftenreihe
IWH-Diskussionspapiere ; no. 33/2016 ppn:837399270