Small firms and domestic bank dependence in Europe's Great Recession

Arbeitspapier

After the inception of the euro, the real economy in most member countries remained dependent on credit by domestic banks, which increasingly funded themselves through cross-border interbank funding. We find that this pattern of 'double-decker' banking integration exposed domestic banks to sharp declines in cross-border interbank lending during the eurozone crisis. As a result, domestic banks reduced lending which led to large declines in output in sectors with many small (bank-dependent) firms. We propose a quantitative small open economy model to account for these patterns and conclude that a global banking shock leading to a sudden stop in cross-border interbank lending in the eurozone is required to account for them.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 397

Klassifikation und Themen

• Klassifikation: Wirtschaft ; International Finance: General ; Financial Aspects of Economic Integration ; Macroeconomic Aspects of International Trade and Finance: General ; Macroeconomic Issues of Monetary Unions
• Thema: Small and medium enterprises ; sme access to finance ; banking integration ; domestic bank dependence ; interbank dependence ; international transmission ; eurozone crisis

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hoffmann, Mathias ; Maslov, Egor ; Sørensen, Bent E.
• Ereignis: Veröffentlichung
• (wer): University of Zurich, Department of Economics
• (wo): Zurich
• (wann): 2021

Weitere Informationen

• DOI: doi:10.5167/uzh-207297
• Handle: http://hdl.handle.net/10419/246285
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ