'Brexit' and the Contraction of Syndicated Lending

36 Pages Posted: 23 Nov 2016 Last revised: 27 May 2020

See all articles by Tobias Berg

Tobias Berg

Goethe University Frankfurt

Anthony Saunders

New York University - Leonard N. Stern School of Business

Larissa Schäfer

Frankfurt School of Finance & Management

Sascha Steffen

Frankfurt School of Finance & Management; Centre for Economic Policy Research (CEPR)

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

Berg, Tobias and Saunders, Anthony and Schäfer, Larissa and Steffen, Sascha, 'Brexit' and the Contraction of Syndicated Lending (May 27, 2020). Available at SSRN: https://ssrn.com/abstract=2874724 or http://dx.doi.org/10.2139/ssrn.2874724

Tobias Berg

Goethe University Frankfurt ( email )

House of Finance
Grueneburgplatz 1
Frankfurt am Main, Hessen 60323
Germany

Anthony Saunders

New York University - Leonard N. Stern School of Business ( email )

44 West 4th Street
9-190, MEC
New York, NY 10012-1126
United States
212-998-0711 (Phone)
212-995-4220 (Fax)

Larissa Schäfer (Contact Author)

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Sascha Steffen

Frankfurt School of Finance & Management ( email )

Adickesallee
32-34
Frankfurt, 60322
Germany
16097326929 (Phone)

HOME PAGE: http://www.sascha-steffen.de

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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