Does bank regulation spill-over to firm financing? SME financing, bank monitoring and the efficiency of the bank lending channel

• This paper analyses spill over between banks and firms when capital is regulated. The current empirical findings and theories observe effects (positive or negative) mainly on SME’s. We contribute to the existing literature by combining determinants of demand and supply of bank credits with respect to both bank and firm options of alternative, or no funding. The study empirically compares Swedish banks and Swedish SME funding with respect to capital regulation in banking. This makes it possible to simultaneously study theories regarding bank monitoring, competition and regulatory arbitrage opportunities with respect to regulations. The main results indicate that there are no effects to the volume of loans from banks, but a significant impact on the loan prices, which we can explain by racing for yield and regulatory arbitrages by the banks.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

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