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Paper #1652

Títol:
The rise of shadow banking: evidence from capital regulation
Autors:
Rustom M. Irani, Rajkamal Iyer, Ralf R. Meisenzahl i JosÚ-Luis Peydrˇ
Data:
Abril 2018
Resum:
We investigate the connections between bank capital regulation and the prevalence of lightly regulated nonbanks (shadow banks) in the U.S. corporate loan market. For identification, we exploit a supervisory credit register of syndicated loans, loan-time fixed-effects, and shocks to capital requirements arising from surprise features of the U.S. implementation of Basel III. We find that less-capitalized banks reduce loan retention and nonbanks step in, particularly among loans with higher capital requirements and at times when capital is scarce. This reallocation has important spillovers: loans funded by nonbanks with fragile liabilities experience greater sales and price volatility during the 2008 crisis.
Paraules clau:
Shadow banks; risk-based capital regulation; Basel III; interactions between banks and nonbanks; trading by banks; distressed debt
Codis JEL:
G01, G21, G23, G28
Àrea de Recerca:
Finances i Comptabilitat / Macroeconomia i Economia Internacional

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