Regulated banks take greater risks abroad, says ECB paper
A working paper, published by the European Central Bank (ECB) on November 6, finds empirical evidence that onerous banking regulation in home jurisdictions lowers banks' lending standards abroad.
The authors, Steven Ongena, Alexander Popov and Gregory Udell, find lower barriers to entry and tighter restrictions on bank activities in domestic markets result in more lax lending standards by multinational banks in foreign markets.
These standards fall even further when combined with higher minimum
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