GSIB Status and Corporate Lending: An International Analysis

Caution: Do Not Cross! Capital Buffers and Lending in COVID-19 Times

“…Our paper also contributes to a growing literature studying the effect of capital requirements on bank lending. Various papers look at the effect of bank-specific capital surcharges (Berrospide and Edge, 2019;Gropp et al, 2019;De Jonghe et al, 2020), structural buffers (Reghezza et al, 2020;Behn and Schramm, 2020;Degryse et al, 2020) and dynamic capital requirements (Aiyar et al, 2014;Auer and Ongena, 2016;Jimenez et al, 2017;Basten, 2019) on bank lending. While this literature largely focuses on the impact of changes in capital requirements, we contribute by investigate the usability of buffers in crisis time, i.e.…”

Macroprudential Regulation: A Risk Management Approach

“…In a diff-in-diff setting Behn and Schramm (2021) do not find a significant effect on the overall lending activity of G-SIB designated companies, but find a significant shift towards lending to less risky counterparties. Degryse et al (2020) find a more pronounced effect by focusing on a narrower time window and unexpected G-SIB designations. Favara et al (2021) look at the US and find that banks designated as G-SIBs do reduce their credit 23 Cf.…”

“…The strong disagreement in the literature is the reason why we prefer not to take a view on the size and social relevance of any MM offsets from equity financing. Instead, as we explain in Section 5.3, we rely on quantifying the short-term effects from higher macroprudential capital requirements on the size of the aggregate lending stock, an effect that has been documented more clearly empirically (Cappelletti et al, 2019;Degryse et al, 2020;Favara et al, 2021).…”

Does Regulation Only Bite the Less Profitable? Evidence from the Too-Big-to-Fail Reforms

“…Behn and Schramm (2020) assess the effect of G-SIB designation on syndicated lending. While they find no effect on lending volumes, Degryse et al (2020) point to an adverse effect. By contrast, our focus is on the framework's impact on the overall systemic footprint of G-SIBs.…”