International Banking and Cross-Border Effects of Regulation: Lessons from the Netherlands

Frost, Jon; Haan, Jakob de; Horen, Neeltje van

doi:10.2139/ssrn.2839791

Cited by 12 publications

(11 citation statements)

References 18 publications

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“…1 In addition, we examine whether prudential policies in host countries affect foreign lending by Dutch insurers and pension funds. Our work thereby complements previous research by Frost et al (2017) who analyze whether foreign bank lending by Dutch banks was affected by prudential policies in the host countries. Based on an analysis of the quarterly international claims of twenty-five Dutch banks in sixty-three countries over 2000-13, these authors report that Dutch banks increase lending in countries that tighten prudential regulation.…”

Section: Introductionsupporting

confidence: 60%

International Lending of Dutch Insurers and Pension Funds: the Impact of ECB Monetary Policy and Prudential Policies in the Host Country

et al. 2019

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We analyze the relationship between ECB monetary policy and prudential policies in the host country and international lending by Dutch insurers and pension funds, using confidential institution-specific data. Our results suggest that insurers and pension funds do not significantly change their foreign lending in response to ECB policy changes, proxied by a shadow rate capturing both conventional and unconventional monetary policies. However, our findings suggest that these financial institutions do increase foreign lending when banks in the host country are more constrained by prudential regulation, pointing to a substitution effect from banks to non-banks.

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Section: Introductionsupporting

confidence: 60%

International Lending of Dutch Insurers and Pension Funds: the Impact of ECB Monetary Policy and Prudential Policies in the Host Country

et al. 2019

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“…As noted by Goodhart (), “the more effective regulation is, the greater the incentive to find ways around it.” This concern also applies to MaPs. Several papers have already estimated the intended effects of MaPs on variables such as banking credit and housing prices (e.g., Morgan, Regis, and Salike , Cerutti, Claessens, and Laeven , Akinci and Olmstead‐Rumsey ), and whether measures “leak” through foreign banks (Aiyar, Calomiris, and Wieladek , Reinhardt and Sowerbutts , Frost, van Horen, and de Haan , Cerutti and Zhou ). Such substitution effects across sectors have not yet been tested empirically in a cross‐country setting.…”

mentioning

confidence: 99%

Effective Macroprudential Policy: Cross‐Sector Substitution from Price and Quantity Measures

Cizel¹,

Frost²,

Houben

et al. 2019

J of Money Credit Banking

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Macroprudential policy is increasingly being implemented worldwide, and is mostly applied to banks. A key question is whether this prompts substitution toward nonbank credit. Using two different global data sets on macroprudential measures and different methodologies, including detrended series, panel estimations, and propensity score matching, we find evidence of such substitution. Substitution toward nonbank credit appears to be stronger when policy measures are binding and are implemented in economies with well‐developed nonbank credit markets. This substitution partially offsets the fall in bank credit, thus dampening the policies’ effect on total credit.

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“…26. Extensive literature comprehends the geographies of the US in Berrospide et al (2016), Dutch banks in Frost et al (2016), France in Bussière et al (2016), Poland in Gajewski and Krzesicki (2017).…”

Section: Discussionmentioning

confidence: 99%

The regulation of multilateral development banks: is it needed? A preliminary analysis

Gianfagna

Crimaldi

Gallan

2021

JFRC

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Purpose A difference is noted by comparing the net loans to the non-financial sector in the two sets of institutions. The post-global financial crisis (GFC), literature agrees on a reduced lending pace by financial institutions (FIs) as a result of stricter capital regulations. At the same time, an increasing volume of outstanding loans, directed even to advanced countries, characterize the balance sheet of several multilateral development banks (MDBs). Design/methodology/approach This paper observes how a different degree of banking regulation might have shaped the economic response to the GFC by FIs and MDBs. Findings The authors indicate that MDBs’ financing, with a coherent objective of countercyclical support to the economies hit by the GFC, seems to have filled a market gap caused by the FIs’ pro-cyclical lending reduction. Originality/value While a controversial issue is whether Basel standards should be imposed on MDBs, a harmonization amongst MDBs of their transparency and reporting standards might be beneficial: some preliminary consideration has been portrayed.

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International Banking and Cross-Border Effects of Regulation: Lessons from the Netherlands

Cited by 12 publications

References 18 publications

International Lending of Dutch Insurers and Pension Funds: the Impact of ECB Monetary Policy and Prudential Policies in the Host Country

International Lending of Dutch Insurers and Pension Funds: the Impact of ECB Monetary Policy and Prudential Policies in the Host Country

Effective Macroprudential Policy: Cross‐Sector Substitution from Price and Quantity Measures

The regulation of multilateral development banks: is it needed? A preliminary analysis

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