Rights statement: 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
Accepted author manuscript, 1.11 MB, PDF document
Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - The real effects of banking supervision
T2 - evidence from enforcement actions
AU - Danisewicz, Piotr Jan
AU - McGowan, Danny
AU - Onali, Enrico
AU - Schaeck, Klaus
N1 - 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
PY - 2018/7
Y1 - 2018/7
N2 - 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.
AB - 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.
KW - Macro-financial linkages
KW - Real effects
KW - Economic growth
KW - Supervision
KW - Enforcement actions
U2 - 10.1016/j.jfi.2016.10.003
DO - 10.1016/j.jfi.2016.10.003
M3 - Journal article
VL - 35
SP - 86
EP - 101
JO - Journal of Financial Intermediation
JF - Journal of Financial Intermediation
SN - 1042-9573
IS - Part A
ER -