Banque de France paper quantifies impact of EBA capital exercise on lending
Researchers find the exercise had a ‘contained’ impact
The capital exercise conducted by the European Banking Authority (EBA) three years ago restricted the lending growth at banks with capital constraints, but only by a "contained" amount, according to a working paper published by the Banque de France today.
In Did the EBA capital exercise cause a credit crunch in the euro area? Jean-Stéphane Mésonnier and Allen Monks find that certain banks – those within a banking group that had to increase capital by 1% of risk-weighted assets or more – tended
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