Template-Type: ReDIF-Paper 1.0
Author-Name: José María Serena Garralda
Author-X-Name-First: José María 
Author-X-Name-Last: Serena Garralda
Author-Name: Serafeim Tsoukas
Author-X-Name-First: Serafeim
Author-X-Name-Last: Tsoukas
Title: International bank lending and corporate debt structure
Abstract: Using a cross-country sample of bank-dependent public firms we study the international spillovers of a change in banking regulation on corporate borrowing. For identification we examine how US firms' liabilities vis-à-vis banks, non-bank lenders and bond markets evolve after an increase in capital requirements implemented by the European Banking Authority (EBA) in 2011. We find that US firms experience a reduction in credit lines but not in term loans from EU banks. In addition, US firms are able to compensate for the reduction in credit lines from EU banks by securing liquidity facilities from US non-bank financial institutions, without increasing borrowing from corporate bond markets. These results suggest that diversified domestic loan markets, with both banks and non-bank financial institutions providing loans to corporations, can help overcome cuts in cross-border bank funding.
Length: 57 pages
Creation-Date: 2020-04
File-URL: https://www.bis.org/publ/work857.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work857.htm
File-Format: text/html
Number: 857
Classification-JEL: G21, G32, F32, F34
Keywords: credit lines, term loans, bank capital requirements, firm-level data, non-bank financial intermediaries
Handle: RePEc:bis:biswps:857