Banks’ foreign homes
Kirsten Schmidt, Lena Tonzer
Deutsche Bundesbank Discussion Papers,
No. 46,
2024
Abstract
Our results reveal that higher lending spreads between foreign and home markets redirect real estate backed lending towards foreign markets offering a higher interest rate, which provides evidence for "search for yield" behavior. This re-allocation is found especially for banks with more expertise on the foreign market due to a higher local activity and holds for commercial and residential real estate backed loans. Furthermore, "search for yield" behavior and a resulting increase in foreign real estate backed lending is found when macroprudential regulation is missing or misaligned between a bank’s country of residence and the destination country. When turning to the question of whether the detected search for yield behavior results in more risk, we find that especially better capitalized banks report higher forbearance ratios as they might face less stigma effects compared to low capitalized banks.
Read article
Banker Directors on Board and Corporate Tax Avoidance
Wenjie Ding, Iftekhar Hasan, Qian Song, Qingwei Wang
Journal of Empirical Finance,
December
2024
Abstract
We investigate how shareholder-debtholder conflict of interest affects the corporate tax avoidance using a unique setting of the affiliated and unaffiliated commercial bankers’ board representation. Consistent with the notion that board representation grants lenders’ access to private information that helps monitor and influence firms’ tax practice, we find that appointments of affiliated banker directors significantly reduce firms’ tax avoidance behavior, while appointing unaffiliated banker directors shows no such effect. The impact of affiliated banker directors on alleviating tax avoidance is stronger among firms with severer conflict of interest between shareholders and debtholders, specifically among firms with weaker corporate governance, higher financial leverage and higher CEO stock ownership.
Read article
Homepage
A turning point for the German economy? The international political environment has fundamentally changed with looming trade wars and a deteriorating security situation in Europe.…
See page
IWH Bankruptcy Research
IWH Bankruptcy Research The Bankruptcy Research Unit of the Halle Institute for Economic Research (IWH) presents the Institute’s research on the topics of corporate bankruptcy,…
See page
Transformation tables for administrative borders in Germany
Transformation tables for administrative borders in Germany The state has the ability to change the original spatial structure of its administrative regions. The stated goal of…
See page
IWH Construction Survey
IWH Construction Survey From 1993 until the first quarter of 2017, the IWH conducted regular surveys among companies. The results of these surveys could be used to promptly…
See page
Management Buyouts
Management Buyouts in Eastern Germany The study on management buyouts (MBOs) examines an important group of East German companies and their development: companies which, in the…
See page
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) The Centre for Evidence-based Policy Advice (IWH-CEP) of the IWH was founded in 2014. It is a platform that bundles and…
See page
Research Clusters
Three Research Clusters Research Cluster "Economic Dynamics and Stability" Research Questions This cluster focuses on empirical analyses of macroeconomic dynamics and stability.…
See page
Macro data interactive
Macro data interactive This service provides time series from official publications (Statistisches Bundesamt [German Federal Statistical Office], Arbeitskreis Volkswirtschaftliche…
See page
