Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289797 
Year of Publication: 
2024
Series/Report no.: 
IWH Discussion Papers No. 12/2024
Publisher: 
Halle Institute for Economic Research (IWH), Halle (Saale)
Abstract: 
The establishment of the European Banking Union constitutes a major change in the regulatory framework of the banking system. Main parts are implemented via directives that show staggered transposition timing across EU member states. Based on the newly compiled Banking Union Directives Database, we assess how banks' funding costs responded to the Capital Requirements Directive IV (CRD IV). Our findings show an upward trend in funding costs which is driven by an increase in cost of equity and partially offset by a decline in cost of debt. The diverging trends are most present in countries with an ex-ante lower regulatory capital stringency, which is in line with banks' short-run adjustment needs but longer-run benefits from increased financial stability.
Subjects: 
banking union
CRD IV
funding costs
staggered difference-in-difference estimators
JEL: 
C52
G01
G18
G21
Document Type: 
Working Paper

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