Abstract
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | European Banking Center |
| Volume | 2011-007 |
| Publication status | Published - 2011 |
Publication series
| Name | EBC Discussion Paper |
|---|---|
| Volume | 2011-007 |
Fingerprint
Keywords
- bank regulation
- cross-border financial institutions
- financial risk
Cite this
}
Bank Risk-Taking Abroad : Does Home-Country Regulation and Supervision Matter. / Ongena, S.; Popov, A.; Udell, G.F.
Tilburg : European Banking Center, 2011. (EBC Discussion Paper; Vol. 2011-007).Research output: Working paper › Discussion paper › Other research output
TY - UNPB
T1 - Bank Risk-Taking Abroad
T2 - Does Home-Country Regulation and Supervision Matter
AU - Ongena, S.
AU - Popov, A.
AU - Udell, G.F.
N1 - Also CentER Discussion Paper 2011-032
PY - 2011
Y1 - 2011
N2 - This paper provides the first empirical evidence on how home-country regulation and supervision affects bank risk-tailing in hostr-country markets. We analyze lending by 136 banks to 8,253 firms in 1,513 different localities across 13 countries. We find strong evidence that laxer regulatory restrictions in the home country are associated with higher loan rejection rates by banks in host-country markets, but that the resulting loans are mostly to small, unaudited, nonexporting, and innovative firms. The results are stronger when banks are less efficiently supervised at home, and they are observed independently from the effect that bank balance sheet have on lending. These findings imply that loose home-country regulation and supervision are associated with important negative externalities for the host-country in terms of more risk-taking by cross-border banks.
AB - This paper provides the first empirical evidence on how home-country regulation and supervision affects bank risk-tailing in hostr-country markets. We analyze lending by 136 banks to 8,253 firms in 1,513 different localities across 13 countries. We find strong evidence that laxer regulatory restrictions in the home country are associated with higher loan rejection rates by banks in host-country markets, but that the resulting loans are mostly to small, unaudited, nonexporting, and innovative firms. The results are stronger when banks are less efficiently supervised at home, and they are observed independently from the effect that bank balance sheet have on lending. These findings imply that loose home-country regulation and supervision are associated with important negative externalities for the host-country in terms of more risk-taking by cross-border banks.
KW - bank regulation
KW - cross-border financial institutions
KW - financial risk
M3 - Discussion paper
VL - 2011-007
T3 - EBC Discussion Paper
BT - Bank Risk-Taking Abroad
PB - European Banking Center
CY - Tilburg
ER -