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

Behn, Markus and Schramm, Alexander (2021): The impact of G-SIB identification on bank lending: Evidence from syndicated loans. In: Journal of Financial Stability, Vol. 57, 100930

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 sub-stantial decline in borrower-and loan-specific risk factors for the affected banks. Moreover, we detect a sig-nificant 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 con-sequences for the real economy have been limited.

• Item Type: Journal article
• Faculties: Economics
• Subjects: 300 Social sciences > 330 Economics
• ISSN: 1572-3089
• Language: English