12 research outputs found
The Impact of Capital on Lending in Economic Downturns and Investor Protection The Case of Large EU Banks
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-antecontrol
and ex-post-control of anti-self-dealing indices, and creditor protection rights index. Our results show
that better investor protection increases the procyclical impact of capital on lending in the sample of banks
reporting unconsolidated data. This is consistent with the view that better shareholders rights protection
induces bank borrowers to take more loans and to engage in more risk-taking, in particular during economic
booms, which results in greater sensitivity of bank lending to capital ratios in economic downturns. The
opposite effect is found in the sample of banks reporting consolidated data. This effect is consistent with the
view that better minority shareholders protection may reduce risk-taking incentives of large banks and result
in better risk management of credit portfolio (and other investments of such banks)
2016 ESC Guidelines for the diagnosis and treatment of acute and chronic heart failure
No abstract available