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How ‘special’ are international banks sponsoring Irish-resident SPEs?

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  • Golden, Brian
  • Maqui, Eduardo

Abstract

This paper extends the literature on cross-border bank debt issuance to non-bank financial intermediation, namely special purpose entities (SPEs). Using a novel dataset for Ireland, the empirical analysis suggests that international banks sponsoring Irish-resident SPEs are financially weaker across a range of bank-level characteristics. Our findings also indicate that banks sustain higher risk profiles and achieve greater access to other debt markets after issuing cross-border debt through SPEs. This non-bank financial intermediation channel enables banks to expand their debt financing more broadly, whilst potentially amplifying the international transmission of risks.

Suggested Citation

  • Golden, Brian & Maqui, Eduardo, 2023. "How ‘special’ are international banks sponsoring Irish-resident SPEs?," Finance Research Letters, Elsevier, vol. 52(C).
  • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006262
    DOI: 10.1016/j.frl.2022.103449
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    Cited by:

    1. Golden, Brian & Maqui, Eduardo, 2018. "Shadow banking risks in non-securitisation SPEs," Economic Letters 12/EL/18, Central Bank of Ireland.
    2. Galstyan, Vahagn & Maqui, Eduardo & McQuade, Peter, 2021. "International debt and special purpose entities: Evidence from Ireland," Journal of International Money and Finance, Elsevier, vol. 115(C).
    3. Golden, Brian & Hughes, Patrick, 2018. "Shining a light on Special Purpose Entities in Ireland," Economic Letters 11/EL/18, Central Bank of Ireland.
    4. Fiedor, Paweł & Killeen, Neill, 2021. "Securitisation special purpose entities, bank sponsors and derivatives," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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