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The effects of supervisory stress testing on bank lending: examining large UK banks
In this paper, we study the effects of supervisory stress test exercises on 19 UK banks over the 2005–2018 period. The novelty of our approach is that we include two stress testing timelines from two banking supervisory authorities. Using a difference-in-difference methodology, in a first step, we a...
Autores principales: | , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Palgrave Macmillan UK
2022
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9012153/ http://dx.doi.org/10.1057/s41261-022-00195-3 |
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author | Ahmed, Kasim Calice, Giovanni |
author_facet | Ahmed, Kasim Calice, Giovanni |
author_sort | Ahmed, Kasim |
collection | PubMed |
description | In this paper, we study the effects of supervisory stress test exercises on 19 UK banks over the 2005–2018 period. The novelty of our approach is that we include two stress testing timelines from two banking supervisory authorities. Using a difference-in-difference methodology, in a first step, we analyse the effects of the Bank of England’s stress tests on the lending behaviour of large UK banks. In a second step, for robustness, we also examine the stress tests administered by the European Banking Authority. Our main result is that banks that failed the stress tests reduced lending. Additionally, we show that the effectiveness of the stress tests exercises remained unchanged throughout the period. |
format | Online Article Text |
id | pubmed-9012153 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2022 |
publisher | Palgrave Macmillan UK |
record_format | MEDLINE/PubMed |
spelling | pubmed-90121532022-04-18 The effects of supervisory stress testing on bank lending: examining large UK banks Ahmed, Kasim Calice, Giovanni J Bank Regul Original Article In this paper, we study the effects of supervisory stress test exercises on 19 UK banks over the 2005–2018 period. The novelty of our approach is that we include two stress testing timelines from two banking supervisory authorities. Using a difference-in-difference methodology, in a first step, we analyse the effects of the Bank of England’s stress tests on the lending behaviour of large UK banks. In a second step, for robustness, we also examine the stress tests administered by the European Banking Authority. Our main result is that banks that failed the stress tests reduced lending. Additionally, we show that the effectiveness of the stress tests exercises remained unchanged throughout the period. Palgrave Macmillan UK 2022-04-15 2023 /pmc/articles/PMC9012153/ http://dx.doi.org/10.1057/s41261-022-00195-3 Text en © The Author(s), under exclusive licence to Springer Nature Limited 2022 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic. |
spellingShingle | Original Article Ahmed, Kasim Calice, Giovanni The effects of supervisory stress testing on bank lending: examining large UK banks |
title | The effects of supervisory stress testing on bank lending: examining large UK banks |
title_full | The effects of supervisory stress testing on bank lending: examining large UK banks |
title_fullStr | The effects of supervisory stress testing on bank lending: examining large UK banks |
title_full_unstemmed | The effects of supervisory stress testing on bank lending: examining large UK banks |
title_short | The effects of supervisory stress testing on bank lending: examining large UK banks |
title_sort | effects of supervisory stress testing on bank lending: examining large uk banks |
topic | Original Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9012153/ http://dx.doi.org/10.1057/s41261-022-00195-3 |
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