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Title: GSIB status and corporate lending: An international analysis

Author(s): Hans Degryse, Mike Mariathasan and Thi Hien Tang

Publication Date: December 2020

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Programme Area(s): Financial Economics

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.

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Bibliographic Reference

Degryse, H, Mariathasan, M and Tang, T. 2020. 'GSIB status and corporate lending: An international analysis'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15564