The real effects of banking supervision: evidence from enforcement actions

Piotr Danisewicz; Danny McGowan; Enrico Onali; Klaus Schaeck

doi:10.1016/j.jfi.2016.10.003

The real effects of banking supervision: evidence from enforcement actions

Piotr Danisewicz, Danny McGowan, Enrico Onali, Klaus Schaeck^*

^*Corresponding author for this work

Aston Business School

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	86-101
Journal	Journal of Financial Intermediation
Volume	35
Issue number	Part A
Early online date	27 Oct 2016
DOIs	https://doi.org/10.1016/j.jfi.2016.10.003
Publication status	Published - 1 Jul 2018

Bibliographical note

Keywords

macro-financial linkages
real effects
economic growth
supervision
enforcement actions

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10.1016/j.jfi.2016.10.003

Real effects of banking supervision
© 2016, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Accepted author manuscript, 1.15 MBLicence: CC BY-NC-ND 3.0

Cite this

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title = "The real effects of banking supervision: evidence from enforcement actions",

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The real effects of banking supervision: evidence from enforcement actions

Abstract

Bibliographical note

Keywords

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