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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Enforcement of banking regulation and the cost of borrowing, Journal of Banking and Finance April (2019). Deli, Yota; Delis, Manthos D.; Hasan, Iftekhar; Liu, Liuling


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Deli, Yota; Delis, Manthos D.; Hasan, Iftekhar; Liu, Liuling 
Number of authors
Status Published
Year of publication 2019 
Date 26.02.2019 
Name of article Enforcement of banking regulation and the cost of borrowing 
Name of journal Journal of Banking and Finance
Volume of issue 101 
Number of issue April 
Pages 147-160 
Abstract We show that borrowing firms benefit substantially from important enforcement actions issued on U.S. banks for safety and soundness reasons. Using hand-collected data on such actions from the main three U.S. regulators and syndicated loan deals over the years 1997–2014, we find that enforcement actions decrease the total cost of borrowing by approximately 22 basis points (or $4.6 million interest for the average loan). We attribute our finding to a competition-reputation effect that works over and above the lower risk of punished banks post-enforcement and survives in a number of sensitivity tests. We also find that this effect persists for approximately four years post-enforcement.
Free text descriptor in Finnish pankit; luotot; hinnoittelu; yritykset; kustannukset; sääntely; pankkivalvonta 
Free text descriptor in English Bank supervision; Enforcement actions; Syndicated loans; Loan pricing 
JEL-codes E44; E51; G21; G28 
ISSN / e-ISSN 0378-4266 
auki Internet addresses
Additional information Available online 29 January 2019.
Notes BoF DP 19/2018 


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