Download This Paper'Brexit' and the Contraction of Syndicated Lending
36 Pages Posted: 23 Nov 2016 Last revised: 27 May 2020
Date Written: May 27, 2020
Abstract
We document a 24% decline in loan issuances in the UK syndicated loan market after the
Brexit vote relative to a set of comparable loan markets. The decline in lending is driven by
a pervasive reduction in demand by UK firms. Changes in GDP forecast around the Brexit
vote explain about 61% of the decline in lending. We do not find evidence, however, that
the UK loses its attractiveness as a financial center for cross-border lending. Our results
point to the resilience of global financial centers in the face of large unexpected shocks.
Keywords: Brexit, Syndicated Loans, Competition, Financial Centers
JEL Classification: G15, G20
Suggested Citation: Suggested Citation
Anthony Saunders
New York University - Leonard N. Stern School of Business ( email )
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