The real effects of banking supervision: evidence from enforcement actions

Danisewicz, Piotr and McGowan, Danny and Onali, Enrico and Schaeck, Klaus (2016) The real effects of banking supervision: evidence from enforcement actions. Journal of Financial Intermediation . ISSN 1042-9573

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Abstract

We present a novel way to examine macro-financial linkages by focusing on the real effects of bank supervisors’ enforcement actions. Exploiting plausibly exogenous variation in supervisory monitoring intensity, we show that enforcement actions in single-market banks trigger temporarily large adverse effects for the macroeconomy by reducing personal income growth, the number of establishments, and increasing unemployment. These effects are related to contractions in bank lending and liquidity creation, and are more pronounced when we consider enforcement actions on both single-market and multi-market banks, and in counties with fewer banks and greater external financial dependence.

Item Type: Article
RIS ID: https://nottingham-repository.worktribe.com/output/821213
Keywords: Macro-financial linkages; Real effects; Economic growth; Supervision; Enforcement actions
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
Identification Number: https://doi.org/10.1016/j.jfi.2016.10.003
Depositing User: Eprints, Support
Date Deposited: 19 Jun 2018 08:08
Last Modified: 04 May 2020 18:15
URI: http://eprints.nottingham.ac.uk/id/eprint/52483

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