Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103362
Authors: 
Bremus, Franziska
Fratzscher, Marcel
Year of Publication: 
2014
Series/Report no.: 
DIW Discussion Papers 1411
Abstract: 
The paper analyzes the effects of changes to regulatory policy and to monetary policy on cross-border bank lending since the global financial crisis. Cross-border bank lending has decreased, and the home bias in the credit portfolio of banks has risen sharply, especially among banks in the euro area. Our results suggest that expansionary monetary policy in the source countries - as measured by the change in reserves held at central banks - has encouraged cross-border lending, both in euro area and non-euro area countries. Regarding regulatory policy, increases in financial supervisory power or independence of the supervisory authorities have encouraged credit outflows from source countries. The findings thus underline the importance of regulatory arbitrage as a driver of cross-border bank flows since the global financial crisis. However, in the euro area, arbitrage in capital stringency was linked to lower cross-border lending since the crisis.
Subjects: 
cross-border bank lending
financial integration
regulation
arbitrage
monetary policy
home bias
JEL: 
F30
G11
G15
G28
Document Type: 
Working Paper

Files in This Item:
File
Size
728.68 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.