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The impact of bank rating changes on lending in major European banks

Author

Listed:
  • Oussama Ben Hmiden

    (ESSCA School of Management)

  • Tanguy Meigné

    (King's college)

Abstract

This study examines the impact of change in bank ratings on the lending behavior of large European banks by comparing a crisis and post-crisis sample. Our findings suggest that, at the outbreak of the crisis, downgraded banks or those with near a plus (+) or minus (-) notch rating granted fewer loans. This behavior is consistent with the financial pressure due to regulatory requirements, such as requests for additional capital that may increase the role of the credit rating agencies in lending decision-making.

Suggested Citation

  • Oussama Ben Hmiden & Tanguy Meigné, 2018. "The impact of bank rating changes on lending in major European banks," Economics Bulletin, AccessEcon, vol. 38(1), pages 638-649.
    • Handle: RePEc:ebl:ecbull:eb-17-00536
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bank rating changes; loans; financial crisis; Basel Capital Accord.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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