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Out with the new, in with the old? Supranational bank supervision and the composition of firm investment

Author

Listed:
  • Ampudia, Miguel
  • Beck, Thorsten
  • Popov, Alexander

Abstract

Using exogenous variation generated by the creation of the Single Supervisory Mechanism (SSM) in the euro area, we find that relative to firms borrowing from banks subject to national supervision, firms borrowing from banks subject to supranational supervision reduce their share of intangible assets. This effect does not pre-date the supervisory reform and it does not obtain in non-SSM jurisdictions. The reallocation of investment away from intangible assets is stronger for small and young firms and appears to be driven by a short-term reduction in lending and a persistent increase in collateral standards. JEL Classification: D25, F30, G21, G28

Suggested Citation

  • Ampudia, Miguel & Beck, Thorsten & Popov, Alexander, 2026. "Out with the new, in with the old? Supranational bank supervision and the composition of firm investment," Working Paper Series 3286, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20263286
    Note: 2445760
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • F30 - International Economics - - International Finance - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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