Capital Regulations and the Rise of Shadow Banking
2019/08/09
研討會日期 : 2019-08-09
時間 : 14:30
主講人 : Professor Radek Paluszynski
主持人 : Professor Wan-Jung Cheng
地點 : Conference Room B110
演講者簡介 : Professor Radek Paluszynski received his Ph.D. in Economics from University of Minnesota in 2016. He is currently an Assistant Professor at the Department of Economics, University of Houston. His research fields are International Economics, Macroeconomics, and Time Inconsistency.
演講摘要 : The Basel III regulations mandated a significant increase in the required level of banks' own capital holding. Using a new micro-level dataset of corporate credit for the largest firms in South Korea in years 2013-2019, we document a 25% decline in credit from regulated banks, and an increase of similar magnitude from non-bank lenders. We use our data to estimate a strongly negative relationship between corporate lending and minimum capital requirements. For identification, we exploit a gradual implementation of the reform in Korea and control for various confounding factors. To understand this finding, we build a quantitative model with heterogeneous banks who accumulate equity and invest in risky loans. In addition, heterogeneous firms may endogenously choose to become a non-bank lender who does not face regulations. We find that an increase in the capital requirement similar to that of Basel III can justify the decrease in regulated bank lending, as well as the rise in shadow lending of the magnitude documented in our data.
