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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | The countercyclical capital buffer and the composition of bank lending |
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| Authors |
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| Language |
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| Institution | Swiss Finance Institute |
| Series Name | Swiss Finance Institute Research Paper |
| Number | 21-66 |
| ISSN | 1556-5068 |
| Number of Pages | 33 |
| Date | 2022 |
| Abstract Text | Do targeted macroprudential measures impact non-targeted sectors too? We investigate the compositional changes in the supply of credit by Swiss banks, exploiting their differential exposure to the activation in 2013 of the countercyclical capital buffer (CCyB) which targeted banks’ exposure to residential mortgages. We find that the additional capital requirements resulting from the activation of the CCyB cause higher growth in banks’ commercial lending. While banks are lending more to all types of businesses, including bigger corporate customers in the syndicated loan market, the new macroprudential policy benefits smaller and riskier businesses the most. However, the interest rates and other costs of obtaining credit for these firms rise as well. |
| Free access at | Official URL |
| Official URL | https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3345189 |
| Digital Object Identifier | 10.2139/ssrn.3345189 |
| Other Identification Number | merlin-id:21876 |
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| Keywords | Macroprudential policy, spillovers, credit, bank capital, systemic risk |
| Additional Information | Revised version |