Freeze! Financial Sanctions and Bank Responses

Arbeitspapier

We study the effects of financial sanctions on cross-border credit supply. Using a differences-in-differences approach to analyze eleven sanctions episodes between 2002 and 2015, we find that banks located in Germany reduce their positions in countries with sanctioned entities by 38%. The average German branch or subsidiary located outside Germany does not adjust its positions after the imposition of sanctions. For affiliated banks located in countries with low financial standards, we even observe a relative increase in credit supply. These effects are stronger if sanctions are only imposed by EU member states and not by the entire UN.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7424

Classification and Topics

• Classification: Wirtschaft ; International Conflicts; Negotiations; Sanctions ; General Financial Markets: Government Policy and Regulation ; Financial Institutions and Services: Government Policy and Regulation ; Corporate Finance and Governance: Government Policy and Regulation ; International Law
• Subject: financial sanctions ; law and finance ; cross-border lending ; international banking

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Efing, Matthias ; Goldbach, Stefan ; Nitsch, Volker
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/198784
• Last update: 10.03.2025, 11:43 AM CET