The death of a regulator: Strict supervision, bank lending, and business activity

• 成果类型: Article
• 署名作者: Granja, Joao; Leuz, Christian
• 署名单位: University of Chicago; Center for Economic & Policy Research (CEPR); University of Chicago; University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103871
• 发表日期: 2024
• 关键词: Bank regulation; bank supervision; Prudential oversight; ENFORCEMENT; Management practices; Loan losses; Credit supply

摘要

We exploit the extinction of the thrift supervisor (OTS) to analyze the effects of supervision on bank lending and bank management. We first show that the OTS replacement resulted in stricter supervision of former OTS banks. Next, we analyze the ensuing lending effects and show that former OTS banks on average increase small business lending by roughly 10 percent. This increase is concentrated in well -capitalized banks and especially in banks that changed management practices following the supervisory transition. These findings suggest that stricter supervision operates not only through the enforcement of loss recognition and capital adequacy, but can also act as a catalyst for operational changes that correct deficiencies in bank management and lending practices, which in turn increase lending.