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The Unintended Consequences of the Launch of the Single Supervisory Mechanism in Europe

Fiordelisi, Franco and Ricci, Ornella and Stentella Lopes, Francesco Saverio (2017) 'The Unintended Consequences of the Launch of the Single Supervisory Mechanism in Europe.' Journal of Financial and Quantitative Analysis, 52 (6). 2809 - 2836. ISSN 0022-1090

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Abstract

The launch of the Single Supervisory Mechanism (SSM) was an historic event. Beginning in Nov. 2014, the most significant banks came under the direct supervision of the European Central Bank (ECB), while national supervisory authorities (NSAs) maintained direct supervision of the remaining banks. Thus, supervision is conducted on two levels, which could cause inconsistency problems. Did the behavior of the significant banks differ from that of the less significant banks during the SSM launch? We find that the significant banks reduced their lending activity more than the less significant banks did in order to shrink their balance sheets and increase their capitalization.

Item Type: Article
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 22 Nov 2019 10:02
Last Modified: 22 Nov 2019 10:02
URI: http://repository.essex.ac.uk/id/eprint/26001

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