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GSIB status and corporate lending: An international analysis

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  • Degryse, Hans
  • Mariathasan, Mike
  • Tang, Thi Hien

Abstract

Global Systemically Important Banks (GSIBs) benefit from implicit government guarantees but face additional capital requirements and oversight. This paper examines the effectiveness of the Financial Stability Board’s recently introduced GSIB-framework and its short-run implications for the real economy, by exploiting the leak of a partially accurate GSIB list by the Financial Times. We find that GSIB-designation reduces the supply of syndicated loans to risky corporate borrowers by 8%, and that these borrowers experience lower asset-, investment- and sales growth than similar firms borrowing from non-GSIB banks. The results appear to be driven by stricter supervision, not by higher capital surcharges.

Suggested Citation

  • Degryse, Hans & Mariathasan, Mike & Tang, Thi Hien, 2020. "GSIB status and corporate lending: An international analysis," CEPR Discussion Papers 15564, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15564
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    Cited by:

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    2. Couaillier, Cyril & Reghezza, Alessio & Rodriguez d’Acri, Costanza & Scopelliti, Alessandro, 2022. "How to release capital requirements during a pandemic? Evidence from euro area banks," Working Paper Series 2720, European Central Bank.
    3. Daniel Dimitrov & Sweder van Wijnbergen, 2023. "Macroprudential Regulation: A Risk Management Approach," Working Papers 765, DNB.
    4. Couaillier, Cyril & Lo Duca, Marco & Reghezza, Alessio & Rodriguez d’Acri, Costanza, 2022. "Caution: do not cross! Capital buffers and lending in Covid-19 times," Working Paper Series 2644, European Central Bank.
    5. Brausewetter, Lars & Ludolph, Melina & Tonzer, Lena, 2023. "Distributional income effects of banking regulation in Europe," IWH Discussion Papers 24/2023, Halle Institute for Economic Research (IWH).
    6. Behn, Markus & Schramm, Alexander, 2020. "The impact of G-SIB identification on bank lending: evidence from syndicated loans," Working Paper Series 2479, European Central Bank.
    7. Behn, Markus & Schramm, Alexander, 2021. "The impact of G-SIB identification on bank lending: Evidence from syndicated loans," Journal of Financial Stability, Elsevier, vol. 57(C).

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