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International Banking and Cross-Border Effects of Regulation: Lessons from Switzerland

Author

Listed:
  • Simone Auer

    (Swiss National Bank)

  • Maja Ganarin

    (Swiss National Bank)

  • Pascal Towbin

    (Swiss National Bank)

Abstract

As part of the IBRN initiative on prudential spillovers, we study the effects of changes in foreign prudential measures on banks in Switzerland. For the average bank we find no evidence that the foreign prudential measures considered affect domestic lending growth or foreign funding growth. Meanwhile, the effects of foreign prudential measures differ across banks with different balance sheet characteristics. In particular, changes in foreign capital regulations do have significant effects on the domestic lending growth of banks with unfavorable liquidity positions (low core deposit ratios or high illiquid asset ratios). However, these effects remain quantitatively small, relative to the overall variability of lending growth.

Suggested Citation

  • Simone Auer & Maja Ganarin & Pascal Towbin, 2017. "International Banking and Cross-Border Effects of Regulation: Lessons from Switzerland," International Journal of Central Banking, International Journal of Central Banking, vol. 13(2), pages 65-93, March.
  • Handle: RePEc:ijc:ijcjou:y:2017:q:1:a:3
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    References listed on IDEAS

    as
    1. Eugenio Cerutti & Ricardo Correa & Elisabetta Fiorentino & Esther Segalla, 2017. "Changes in Prudential Policy Instruments - A New Cross-Country Database," International Journal of Central Banking, International Journal of Central Banking, vol. 13(2), pages 477-503, March.
    2. Toni Beutler & Robert Bichsel & Adrian Bruhin & Jayson Danton, 2015. "The Impact of Interest Rate Risk on Bank Lending," Working Papers 15.05, Swiss National Bank, Study Center Gerzensee.
    3. Georg Junge & Peter Kugler, 2013. "Quantifying the Impact of Higher Capital Requirements on the Swiss Economy," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(III), pages 313-356, September.
    4. Christoph Basten & Catherine Koch, 2014. "Higher bank capital requirements and mortgage pricing: evidence from the Counter-Cyclical Capital Buffer," ECON - Working Papers 169, Department of Economics - University of Zurich.
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    Cited by:

    1. Claudia M Buch & Linda S Goldberg, 2017. "Cross-Border Prudential Policy Spillovers: How Much? How Important? Evidence from the International Banking Research Network," International Journal of Central Banking, International Journal of Central Banking, vol. 13(2), pages 505-558, March.
    2. Alejandro Jara & Luis Cabezas, 2017. "International Banking and Cross-Border Effects of Regulation: Lessons from Chile," International Journal of Central Banking, International Journal of Central Banking, vol. 13(2), pages 95-127, March.
    3. Jose M Berrospide & Ricardo Correa & Linda S Goldberg & Friederike Niepmann, 2017. "International Banking and Cross-Border Effects of Regulation: Lessons from the United States," International Journal of Central Banking, International Journal of Central Banking, vol. 13(2), pages 435-476, March.
    4. Simone Auer & Christian Friedrich & Maja Ganarin & Teodora Paligorova & Pascal Towbin, 2018. "International Monetary Policy Transmission through Banks in Small Open Economies," Working Papers 2018-04, Swiss National Bank.

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