Arbeitspapier
Cyclicality of SME lending and government involvement in banks
Recent regulatory efforts aim at lowering the cyclicality of bank lending because of its potential detrimental effects on financial stability and the real economy. We investigate the cyclicality of SME lending by local banks with vs. without a public mandate, controlling for location, size, loan maturity, funding structure, liquidity, profitability, and credit demand-side factors. The public mandate is set by local governments and stipulates a deviation from strict profit maximization and a sustainable provision of financial services to local customers. We find that banks with a public mandate are 25 percent less cyclical than other local banks. The result is credit supply-side driven and especially strong for savings banks with high liquidity and stable deposit funding. Our findings have implications for the banking structure, financial stability and the finance-growth nexus in a local context.
- ISBN
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978-3-95729-206-3
- Language
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Englisch
- Bibliographic citation
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Series: Bundesbank Discussion Paper ; No. 39/2015
- Classification
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Wirtschaft
Financial Institutions and Services: General
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- Subject
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Banks
Loan growth
SME finance
Business cycles
Financial stability
- Event
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Geistige Schöpfung
- (who)
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Behr, Patrick
Foos, Daniel
Norden, Lars
- Event
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Veröffentlichung
- (who)
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Deutsche Bundesbank
- (where)
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Frankfurt a. M.
- (when)
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2015
- Handle
- Last update
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10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Behr, Patrick
- Foos, Daniel
- Norden, Lars
- Deutsche Bundesbank
Time of origin
- 2015