The impact of capital requirements on Swedish bank lending: A study on the effects of higher capital regulations
(2018) NEKN01 20181Department of Economics
- Abstract
- The increased capital requirements, as a result of Basel III regulations, have been
widely debated among bankers, regulators and other agents. In this thesis, we aim to
evaluate if the increased capital requirements have had an effect on bank lending in
Sweden. To analyze this, we gather quarterly data from the four largest Swedish
banks and divide lending to the public into five categories. We use a dynamic panel
regression on our novel data set and regress loan growth for the different lending
sectors on increased capital requirements. We find that the increased capital
requirements seem to have no effect on loan growth for any of the sectors analyzed.
Also, we find indications that capital ratios have been affected by higher... (More) - The increased capital requirements, as a result of Basel III regulations, have been
widely debated among bankers, regulators and other agents. In this thesis, we aim to
evaluate if the increased capital requirements have had an effect on bank lending in
Sweden. To analyze this, we gather quarterly data from the four largest Swedish
banks and divide lending to the public into five categories. We use a dynamic panel
regression on our novel data set and regress loan growth for the different lending
sectors on increased capital requirements. We find that the increased capital
requirements seem to have no effect on loan growth for any of the sectors analyzed.
Also, we find indications that capital ratios have been affected by higher capital
requirements since the banks seem to gradually rebuild their capital buffer that they
initially held above the regulatory minimum. We conclude that regulators seem to
have been successful in not harming Swedish banks’ lending behavior. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8947616
- author
- Ljung, Anton LU and Schennings, Axel
- supervisor
-
- Claes Bäckman LU
- Birger Nilsson LU
- organization
- course
- NEKN01 20181
- year
- 2018
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Capital requirements, Basel, Bank lending, Financial stability
- language
- English
- id
- 8947616
- date added to LUP
- 2018-07-03 14:21:00
- date last changed
- 2018-07-03 14:21:00
@misc{8947616, abstract = {{The increased capital requirements, as a result of Basel III regulations, have been widely debated among bankers, regulators and other agents. In this thesis, we aim to evaluate if the increased capital requirements have had an effect on bank lending in Sweden. To analyze this, we gather quarterly data from the four largest Swedish banks and divide lending to the public into five categories. We use a dynamic panel regression on our novel data set and regress loan growth for the different lending sectors on increased capital requirements. We find that the increased capital requirements seem to have no effect on loan growth for any of the sectors analyzed. Also, we find indications that capital ratios have been affected by higher capital requirements since the banks seem to gradually rebuild their capital buffer that they initially held above the regulatory minimum. We conclude that regulators seem to have been successful in not harming Swedish banks’ lending behavior.}}, author = {{Ljung, Anton and Schennings, Axel}}, language = {{eng}}, note = {{Student Paper}}, title = {{The impact of capital requirements on Swedish bank lending: A study on the effects of higher capital regulations}}, year = {{2018}}, }