Freeze! Financial Sanctions and Bank Responses

Abstract Using regulatory data, we study German bank lending in countries targeted by financial sanctions. We find that domestic banks in Germany reduce lending in sanctioned countries, whereas their foreign bank affiliates outside Germany increase lending. In some cases, this is because the bank af...

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Veröffentlicht in:The Review of financial studies 2023-11, Vol.36 (11), p.4417-4459
Hauptverfasser: Efing, Matthias, Goldbach, Stefan, Nitsch, Volker
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creator Efing, Matthias
Goldbach, Stefan
Nitsch, Volker
description Abstract Using regulatory data, we study German bank lending in countries targeted by financial sanctions. We find that domestic banks in Germany reduce lending in sanctioned countries, whereas their foreign bank affiliates outside Germany increase lending. In some cases, this is because the bank affiliates’ host countries have not imposed sanctions themselves. However, even German bank affiliates in host countries that enact sanctions like Germany increase lending if these host countries lack strong institutions and anticrime policies. These findings suggest that even universally adopted sanctions distort bank capital flows and competition if the level of their enforcement varies across bank locations. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online
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source Oxford Journals Online; Business Source Complete
subjects 2002-2015
Deutschland
Filiale
Internationale Bank
Kreditgeschäft
Sanktion
Welt
title Freeze! Financial Sanctions and Bank Responses
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