Less Bank Regulation, More Non-Bank Lending
| Autor: | Mary Chen, Seung Jung Lee, Daniel Neuhann, Farzad Saidi |
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| Rok vydání: | 2023 |
| Zdroj: | Finance and Economics Discussion Series. :1-38 |
| ISSN: | 2767-3898 1936-2854 |
| DOI: | 10.17016/feds.2023.026 |
| Popis: | Bank deregulation in the form of the repeal of the Glass-Steagall Act facilitated the entry of non-bank lenders into the market for syndicated loans during the pre-2008 credit boom. Institutional investors disproportionately purchase tranches of loans originated by universal banks able to cross-sell loans and underwriting services to firms (as permitted by the repeal). A shock to cross-selling intensity increases loan liquidity at origination and over time. The mechanism is that non-loan exposures ensure monitoring even when banks retain small loan shares. Our findings complement the conventional view that regulatory arbitrage caused the rise of non-bank lenders. |
| Databáze: | OpenAIRE |
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