The Impact of Capital on Lending in Economic Downturns and Investor Protection - the Case of Large EU Bank

• Autorzy: Małgorzata Olszak , Mateusz Pipień , Sylwia Roszkowska , Iwona Kowalska
• Języki publikacji: EN

Abstrakty

EN

This paper attempts to find out whether better quality of investor protection matters for the effect of capital ratio on loan growth of large EU banks in 1996-2011. We focus on several measures of the quality of investor protection with a proven track record in the banking literature, i.e.: anti-self-dealing index, ex-ante-control and ex-post-control of anti-self-dealing indices, and creditor protection rights index. Our results show that better investor protection decreases the procyclical impact of capital on lending. This effect is statistically significant for the ex-post-control index. This is consistent with the view that better shareholders rights reduces bank risk-taking, in particular during economic booms, which results in weakned sensitivity of bank lending to capital ratios in economic downturns. This effect holds for both unconsolidated and consolidated data and is robust to sensitivity checks. (original abstract)

Słowa kluczowe

EN

Bank loans; Protection of shareholders; Credit guarantee

PL

Pożyczki bankowe; Ochrona interesów akcjonariuszy; Gwarancje kredytowe

• Czasopismo: Central European Journal of Economic Modelling and Econometrics (CEJEME)
• Rocznik: 2018
• Tom: 10
• Numer: nr 2
• Strony: 133--167

Twórcy

autor

Małgorzata Olszak

• University of Warsaw, Poland

autor

Mateusz Pipień

• Cracow University of Economics, Poland

autor

Sylwia Roszkowska

• University of Lodz, Poland

autor

Iwona Kowalska

• University of Warsaw, Poland

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