Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314419 
Year of Publication: 
2025
Series/Report no.: 
BOFIT Discussion Papers No. 1/2025
Publisher: 
Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT), Helsinki
Abstract: 
Regulators increasingly rely on supervisory technologies (SupTech) to enhance bank supervision, but their potential role in disciplining bank behavior remains unclear. We address this knowledge gap using unique data from the SupTech application of the Central Bank of Brazil. We show that, after a SupTech event, banks reveal inconsistencies in their risk reporting and tighten credit to less creditworthy firms, effectively reducing risk-taking. This credit tightening in turn has small spillovers on less creditworthy firms borrowing from affected banks. Our results can be explained by a moral suasion channel, offering novel insights into the role of SupTech in bank supervision.
Subjects: 
Bank supervision
SupTech
Bank risk-taking
Bank lending
Real effects
JEL: 
G21
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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