'Brexit' and the Contraction of Syndicated Lending
54 Pages Posted: 23 Nov 2016 Last revised: 20 Jun 2019
Date Written: May 20, 2019
We document a 23% decline in loan issuances in the UK syndicated loan market after the Brexit vote relative to a set of comparable loan markets both globally and in the EU and using a matched sample based on pre-Brexit loan issuances. The decline in lending is mostly driven by a reduction of UK firm borrowing, but we do not find evidence that the UK loses its attractiveness as a financial center for cross-border borrowing. We also do not find differential effects along any cross-sectional dimension (firm characteristics, additional demand for corporate bonds, loan market segments or types). The drop in lending thus seems pervasive among UK firms.
Keywords: Brexit, Syndicated Loans, Competition, Financial Centers
JEL Classification: G15, G20
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