DP15564 GSIB status and corporate lending: An international analysis
|Author(s):||Hans Degryse, Mike Mariathasan, Thi Hien Tang|
|Publication Date:||December 2020|
|Programme Areas:||Financial Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=15564|
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.