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Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Do exposures to sagging real estate, subprime or conduits abroad lead to contraction and flight to quality in bank lending at home? |
Organization Unit | |
Authors |
|
Item Subtype | Original Work |
Refereed | Yes |
Status | Published in final form |
Language |
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Journal Title | Review of Finance |
Publisher | Oxford University Press |
Geographical Reach | international |
ISSN | 1572-3097 |
Volume | 22 |
Number | 4 |
Page Range | 1335 - 1373 |
Date | 2018 |
Abstract Text | We investigate how differential exposures by German banks to the US real estate market affect domestic lending in Germany when home prices started to decline in the US. We find that banks with an exposure to the US real estate sector and to conduits shift their domestic lending to industry–region combinations with lower insolvency ratios following a decrease in US home prices. These banks also contract their lending to German firms more than banks that do not have such exposure. We mainly document that possible losses abroad shift bank lending at home where the size of the effect depends on the type and the degree of exposure the bank has. |
Digital Object Identifier | 10.1093/rof/rfy011 |
Other Identification Number | merlin-id:16244 |
PDF File | Download from ZORA |
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Additional Information | This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Review of Finance following peer review. The definitive publisher-authenticated version Review of Finance (2018), 22(4):1335-1373. is available online at: https://doi.org/10.1093/rof/rfy011 . |