Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198784 
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7424
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study the effects of financial sanctions on cross-border credit supply. Using a differences-in-differences approach to analyze eleven sanctions episodes between 2002 and 2015, we find that banks located in Germany reduce their positions in countries with sanctioned entities by 38%. The average German branch or subsidiary located outside Germany does not adjust its positions after the imposition of sanctions. For affiliated banks located in countries with low financial standards, we even observe a relative increase in credit supply. These effects are stronger if sanctions are only imposed by EU member states and not by the entire UN.
Subjects: 
financial sanctions
law and finance
cross-border lending
international banking
JEL: 
F51
G18
G28
G38
K33
Document Type: 
Working Paper
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