Chaire ACPR régulation et risque systèmique Assessing the Impact of Basel III on European Bank Lending
The failures of the banking sector to promote sustainable lending and build substantial capital and liquidity buffers prior to the 2008 Financial Crisis addressed the rationale for implementing Basel III. In this paper, we question the fundamental role of this new regulatory regime in promoting bank lending specifically for European systemic banks. Our empirical findings suggest that Basel III had no detrimental effects on bank lending. Instead, the capital and liquidity standards appear to strengthen the credit structure for this type of bank. Our results also suggest that a credit crunch scenario in Europe is likely due to the deterioration of the quality of the loan portfolio rather than the application of stricter regulatory requirements.
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- Publié le 12/10/2023
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Mis à jour le : 12/10/2023 10:43