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International bank credit, nonbank lenders, and access to external financing

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  • Jose-Maria Serena
  • Marina-Eliza Spaliara
  • Serafeim Tsoukas

Abstract

Using a cross-country firm-bank dataset, we examine how an unexpected increase in bank capital requirements by the European Banking Authority (EBA) affects firms' financial choices. Our results first suggest that the regulatory shock implies a reduction in the supply of bank credit, with US firms affected the most. Yet, following the capital exercise, US firms are able to tap into the public bond markets and secure credit lines from nonbank financial institutions. This has implications for their capital structure and their real outcomes. These results suggest that diversified domestic loan markets, in which banks and nonbank financial institutions lend to corporations, can help overcome reductions in cross-border bank funding.

Suggested Citation

  • Jose-Maria Serena & Marina-Eliza Spaliara & Serafeim Tsoukas, 2022. "International bank credit, nonbank lenders, and access to external financing," Working Papers 2022_04, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2022_04
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    More about this item

    Keywords

    International bank credit; nonbank lenders; external financing;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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