‘O-SII’ limits decreased risky lending – ECB paper

Lending to risky borrowers fell without lasting impact on growth rates, researchers say

Euro sign, Frankfurt

Imposing capital buffers on the second-largest tier of European Union banks has reduced risky lending, a working paper published by the European Central Bank finds.

In the paper, Giuseppe Cappelletti et al study the impact of the ‘Other Systemically Important Institutions’ designation.

The conditions for labelling EU banks as O-SIIs are set by the European Banking Authority. When national regulators in the eurozone decide that local banks have passed a certain threshold, they are classified as

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