CEPR Discussion Paper – Local Bank Supervision

Author(s):Di Gong, Thomas Lambert, Wolf Wagner Date:November 2023 Abstract: This paper provides novel evidence for informational advantages of local bank supervision, outweighing biases due to the pursuit of local interests. For identification, we exploit a policy reform in China that moved supervision for a subset of bank branches from the national to the city level.[…]

NBER Working Paper – Credit Allocation and Macroeconomic Fluctuations

Author(s):Karsten Müller & Emil Verner Date:June 2023 Abstract: We study the relationship between credit expansions, macroeconomic fluctuations, and financial crises using a novel database on the sectoral distribution of private credit for 117 countries since 1940. We document that, during credit booms, credit flows disproportionately to the non-tradable sector. Credit expansions to the non-tradable sector,[…]

BFI Working Paper – How (In)effective was Bank Supervision During the 2022 Monetary Tightening?

Author(s):Yadav Gopalan, Joao Granja Date:September 2023 Abstract: We investigate how effective was bank supervision before, during, and after the monetary tightening of 2022. We find that bank supervisors were aware of the interest rate risks that were emerging in the banking system and began downgrading the ratings of banks with significant exposures to such risks[…]

CEPR Discussion Paper – Global Capital Allocation

Author(s):Sergio Florez-Orrego, Matteo Maggiori, Jesse Schreger, Ziwen Sun, Serdil Tinda Date:September 2023 Abstract: We survey the literature on global capital allocation. We begin by reviewing the rise of cross-border investment, the shift towards portfolio investment, and the literature focusing on aggregate patterns in multilateral and bilateral positions. We then turn to the recent literature that[…]

BoE Staff Working Paper – Granular banking flows and exchange-rate dynamics

Author(s):Balduin Bippus, Simon Lloyd & Daniel Ostry Date:September 2023 Abstract: Using data on the external assets and liabilities of global banks based in the UK, the world’s largest centre for international banking, we identify exogenous cross-border banking flows by constructing novel granular instrumental variables. In line with the predictions of a new granular international banking[…]

NBER Working Paper – Banking without Deposits: Evidence from Shadow Bank Call Reports

Author(s):Erica Jiang, Gregor Matvos, Tomasz Piskorski & Amit Seru Date:March 2020 (revised September 2023) Abstract: We ask how much leverage banks would choose in the absence of safety nets tied to insured deposits. Using uniquely assembled data on capital structure decisions of shadow banks – intermediaries that provide banking services but are not funded by[…]

CEPR Discussion Paper – Sharing the Burden Equally? Intra-Group Effects of Bank Capital Requirements

Author(s):Hans Degryse, Mike Mariathasan, Carola Theunisz Date:September 2023 Abstract: This paper investigates the intra-group transmission of stricter capital regulation imposed at the banking group level. Specifically, we study how a policy-induced increase in the regulatory capital ratio impacts the capital adequacy composition, lending and risk-taking of the affiliated subsidiaries. Using a combination of bank and[…]

CEPR Discussion Paper – Bank restructuring under asymmetric information: The role of bad loan sales

Author(s):Anatoli Segura, Javier Suarez Date:September 2023 Abstract: We study restructuring solutions to the debt overhang problem faced by banks with a deteriorated loan portfolio in the presence of asymmetric information on loan quality. Classical liability restructuring solutions fail to work because banks can overstate the severity of their bad loan problem to obtain additional concessions[…]

CEPR Discussion Paper – Keep Calm and Bank On: Panic-Driven Bank Runs and the Role of Public Communication

Author(s):Damiano Sandri, Francesco Grigoli, Yuriy Gorodnichenko, Olivier Coibion Date:September 2023 Abstract: Using a survey with information treatments conducted in the aftermath of SVB’s collapse, we study households’ perspectives on bank stability, the potential for panic-driven bank runs, and the role of public communication. When informed about SVB’s collapse, households become more likely to withdraw deposits,[…]

CEPR Discussion Paper – The macroeconomic effects of bank capital regulation

Author(s):Sandra Eickmeier, Benedikt Kolb, Esteban Prieto Date:August 2023 Abstract: Using a narrative identification strategy, we trace the dynamic effects of higher US capital requirements to bank lending and the real economy. In the short run, banks deleverage and reduce lending, which in turn lowers real economic activity. However, these effects are temporary. Over the longer[…]