The real effects of banking supervision:evidence from enforcement actions

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

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.

Publication DOI: https://doi.org/10.1016/j.jfi.2016.10.003
Divisions: Aston Business School
Additional Information: © 2016, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: macro-financial linkages,real effects,economic growth,supervision,enforcement actions,Finance,Economics and Econometrics
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
Published Online Date: 2016-10-27
Authors: Danisewicz, Piotr
McGowan, Danny
Onali, Enrico ( 0000-0003-3723-2078)
Schaeck, Klaus

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