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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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:
?? macro-financial linkagesreal effectseconomic growthsupervisionenforcement actionsfinanceeconomics and econometrics ??
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Deposited On:
02 Nov 2016 11:34
Last Modified:
24 Nov 2023 00:22