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The spillover effect of enforcement actions on bank risk-taking

Caiazza, Stefano and Cotugno, Matteo and Fiordelisi, Franco and Stefanelli, Valeria (2018) 'The spillover effect of enforcement actions on bank risk-taking.' Journal of Banking and Finance, 91. 146 - 159. ISSN 0378-4266

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Abstract

Enforcement actions (sanctions) aim to penalize guilty companies and provide examples to other companies that bad behavior will be penalized. A handful of papers analyze the consequences of sanctions in banking for sanctioned companies, while no papers have investigated the spillover effects on non-sanctioned banks. Focusing on credit-related sanctions, we show the existence of a spillover effect: non-sanctioned banks behave similar to sanctioned banks, depending on their degree of similarity, offloading problematic loans and reducing their lending activity.

Item Type: Article
Uncontrolled Keywords: Enforcement action, Banking, Credit, Spillover effect
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 09:57
Last Modified: 22 Nov 2019 10:15
URI: http://repository.essex.ac.uk/id/eprint/25995

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