The real effects of banking supervision : evidence from enforcement actions

Danisewicz, Piotr Jan and McGowan, Danny and Onali, Enrico and Schaeck, Klaus (2018) The real effects of banking supervision : evidence from enforcement actions. Journal of Financial Intermediation, 35 (Part A). pp. 86-101. 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:

Journal Article

Journal or Publication Title:

Journal of Financial Intermediation

Additional Information:

This is the author’s version of a work that was accepted for publication in Journal of Financial Intermediation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Intermediation, 35, Part A, 2018 DOI: 10.1016/j.jfi.2016.10.003

Uncontrolled Keywords:

/dk/atira/pure/subjectarea/asjc/2000/2003

Subjects:

?? macro-financial linkagesreal effectseconomic growthsupervisionenforcement actionsfinanceeconomics and econometrics ??

Departments:

Lancaster University Management School > Accounting & Finance

ID Code:

82505

Deposited By:

ep_importer_pure

Deposited On:

02 Nov 2016 11:34

Refereed?:

Yes

Published?:

Published

Last Modified:

05 Sep 2024 00:30

URI:

https://eprints.lancs.ac.uk/id/eprint/82505