Journal of Financial Intermediation Vol. 63 2025
Effects of bank capital requirements on lending by banks and non-bank financial institutions
Abstract
What is the impact of a sudden and sizeable increase in bank capital requirements on the lending activity by directly affected banks and by non-affected non-bank financial institutions (NBFIs)? To answer this question, we apply a difference-in-differences methodology around the capital exercise by the European Banking Authority (EBA) in 2011 with German credit register data. We find that insurance companies, financial enterprises, and factoring companies — but not leasing companies or very large NBFIs — and Non-EBA banks expand their corporate lending relative to EBA banks. In particular, NBFIs use the opportunity to expand their credit activities, in riskier and more competitive borrower segments.
- DOI
- 10.1016/j.jfi.2025.101167
- Volume
- 63
- Pages
- 101167
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref