The rise of shadow banking: evidence from capital regulation

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• dc.contributor.author Irani, Rustom M.
• dc.contributor.author Iyer, Rajkamal
• dc.contributor.author Meisenzahl, Ralf R.
• dc.contributor.author Peydró, José-Luis
• dc.date.accessioned 2021-01-26T10:20:55Z
• dc.date.available 2021-01-26T10:20:55Z
• dc.date.issued 2020
• dc.description.abstract 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, particularly among loans with higher capital requirements and at times when capital is scarce, and nonbanks step in. This reallocation is associated with important adverse effects during the 2008 crisis: loans funded by nonbanks with fragile liabilities are less likely to be rolled over and experience greater price volatility.
• dc.description.sponsorship This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No 648398). Peydró also acknowledges financial support from the ECO2015-68182-P (MINECO/FEDER, UE) grant and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2015-0563).
• dc.format.mimetype application/pdf
• dc.identifier.citation Irani RM, Iyer R, Meisenzahl RR, Peydró JL. The rise of shadow banking: evidence from capital regulation. The Review of Financial Studies. 2021 May;34(5):2181-35. DOI: 10.1093/rfs/hhaa106
• dc.identifier.doi http://dx.doi.org/10.1093/rfs/hhaa106
• dc.identifier.issn 0893-9454
• dc.identifier.uri http://hdl.handle.net/10230/46265
• dc.language.iso eng
• dc.publisher Oxford University Press
• dc.relation.ispartof The Review of Financial Studies. 2021 May;34(5):2181-35. DOI: 10.1093/rfs/hhaa106
• dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/648398
• dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2015-68182-P
• dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/SEV-2015-0563
• dc.rights © The Author(s) 2020. Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by/4.0/
• dc.subject.other Bancs -- Capital
• dc.subject.other Entitats financeres
• dc.subject.other Bancs -- Administració
• dc.title The rise of shadow banking: evidence from capital regulation
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion