International Banking and Cross-Border Effects of Regulation: Lessons from France

DOCUMENT DE TRAVAIL N° 599

33 Pages Posted: 3 Sep 2016

Date Written: August 1, 2016

Abstract

As part of the International Banking Research Network, the Banque de France contribution to the research project on prudential policy spillovers concentrates on the “outward” adjustment of French banks’ cross-border lending. We consider both adjustment of cross-border lending to foreign (“destination country”) as well as French (“home country”) regulation and investigate differences between financial and non-financial counterparties. For some regulatory measures, we find that French banks increase their cross-border lending growth in response to regulatory tightening abroad – presumably because they are not subject to these regulatory changes. All in all, we do not find particularly large quantitative adjustments to changes in foreign regulatory policies. Lastly, we find that balance sheet variables are important for the adjustment of cross-border lending growth in response to French regulatory policy changes.

Keywords: International banking, prudential regulation, international spillovers

JEL Classification: F36, G21, G28

Suggested Citation

Bussiere, Matthieu and Schmidt, Julia and Vinas, Frédéric, International Banking and Cross-Border Effects of Regulation: Lessons from France (August 1, 2016). DOCUMENT DE TRAVAIL N° 599, Available at SSRN: https://ssrn.com/abstract=2833842 or http://dx.doi.org/10.2139/ssrn.2833842

Matthieu Bussiere (Contact Author)

Banque de France ( email )

Paris
France

Julia Schmidt

Banque de France ( email )

Paris
France

Frédéric Vinas

Banque de France ( email )

Paris
France

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