Kicking the Can Down the Road: Government Interventions in the European Banking Sector

• 成果类型: Article
• 署名作者: Acharya, Viral V.; Borchert, Lea; Jager, Maximilian; Steffen, Sascha
• 署名单位: New York University; University of Mannheim; Frankfurt School Finance & Management
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab002
• 发表日期: 2021
• 页码: 4090
• 关键词: Moral hazard; Bailouts; failures; credit; RISK; tarp; time; too; performance; incentives

摘要

We analyze government interventions in the eurozone banking sector during the 2008-2009 financial crisis. Using a novel data set, we document that fiscally constrained governments kicked the can down the road by providing banks with guarantees instead of fully-fledged recapitalizations. We econometrically address the endogeneity associated with bailout decisions in identifying their consequences. We find that forbearance prompted undercapitalized banks to shift their assets from loans to risky sovereign debt and engage in zombie lending, resulting in weaker credit supply, elevated risk in the banking sector, and, eventually, a greater reliance on liquidity support from the European Central Bank.