Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe paper analyzes the effects of changes to regulatory policy and to monetary policy on crossborder 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 crossborder 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. We study the determinants of the structural changes in cross-border banking in the aftermath of the GFC. In particular, we are interested in the importance of specific push and pull factors that have been recently discussed, namely adjustments in banking regulation and the role of monetary policy in advanced countries.In a second step, we ask how the home bias in the credit portfolio of banking systems has been affected by changes in regulatory and monetary policy since the crisis. The analysis of the home bias is a complementary analysis as it takes a different perspective on the same question of the drivers of cross-border banking. Using the bilateral home bias between country pairs as the dependent variable allows us to take the portfolio decision of banks more directly into account. That is, it allows us to 2 investigate how changes to regulatory policy and monetary policy have influenced the decision of banks to invest in a particular country compared to the home country and third countries.As discussed in previous studies, differences in banking regulation may be important push or pull factors for cross-border bank claims (e.g. Houston, Lin and Ma, 2012), and hence for credit home bias. If regulatory conditions differ across countries, banks may be attracted by regions offering a less restrictive regulatory environment. A factor that could reduce cross-border lending are stricter regulatory requirements that make foreign lending more expensive. Using information o...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe paper analyzes the effects of changes to regulatory policy and to monetary policy on crossborder 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 crossborder 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. We study the determinants of the structural changes in cross-border banking in the aftermath of the GFC. In particular, we are interested in the importance of specific push and pull factors that have been recently discussed, namely adjustments in banking regulation and the role of monetary policy in advanced countries.In a second step, we ask how the home bias in the credit portfolio of banking systems has been affected by changes in regulatory and monetary policy since the crisis. The analysis of the home bias is a complementary analysis as it takes a different perspective on the same question of the drivers of cross-border banking. Using the bilateral home bias between country pairs as the dependent variable allows us to take the portfolio decision of banks more directly into account. That is, it allows us to 2 investigate how changes to regulatory policy and monetary policy have influenced the decision of banks to invest in a particular country compared to the home country and third countries.As discussed in previous studies, differences in banking regulation may be important push or pull factors for cross-border bank claims (e.g. Houston, Lin and Ma, 2012), and hence for credit home bias. If regulatory conditions differ across countries, banks may be attracted by regions offering a less restrictive regulatory environment. A factor that could reduce cross-border lending are stricter regulatory requirements that make foreign lending more expensive. Using information o...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The banking sector for many countries is indeed granular, as the right tail of the bank size distribution follows a power law. We then demonstrate granular effects in the banking sector on macroeconomic outcomes. The presence of big banks measured by high market concentration is associated with a positive and significant relationship between bank-level credit growth and aggregate growth of credit or gross domestic product. Terms of use: Documents in

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This allows us to examine the effects of persistence in the unemployment process on portfolio choice. Our main findings are, first, that in case of short-term unemployment only, social security systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio-share invested in risky assets. Second, the simulation results reveal that when allowing for long-term unemployment the equity-share is suppressed, especially for young investors. We show that this negative effect of unemployment is mainly driven by its persistence. Terms of use: Documents in JEL Classification Codes: D91, E21, H31

Does the structure of banking markets affect macroeconomic volatility and, if yes, is this link different in low‐income countries? In this paper, we explore the channels through which the structure of banking markets affects macroeconomic volatility. Our research has three main findings. First, we study whether idiosyncratic volatility at the bank level can impact aggregate volatility. We find weak evidence for a link between granular banking sector volatility and macroeconomic fluctuations. Second, a higher share of domestic credit to GDP coincides with higher volatility in the short run. Third, a higher level of cross‐border asset holdings increases volatility in low‐income countries.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The banking sector for many countries is indeed granular, as the right tail of the bank size distribution follows a power law. We then demonstrate granular effects in the banking sector on macroeconomic outcomes. The presence of big banks measured by high market concentration is associated with a positive and significant relationship between bank-level credit growth and aggregate growth of credit or gross domestic product. Terms of use: Documents in