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Professor Dr Lena Tonzer

Professor Dr Lena Tonzer
Current Position

since 9/21

Research Fellow Department of Financial Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 5/14

Head of the Research Group Regulation of International Financial Markets and International Banking

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 9/21

Assistant Professor

VU Amsterdam

since 5/14

Head of the International Banking Library

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

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Research Interests
  • banking and sovereign debt crises
  • integration of financial markets
  • banking regulation
  • International Banking Library

Lena Tonzer is Assistant Professor at Vrije Universiteit Amsterdam since September 2021 and a member of the Department of Financial Markets at IWH since May 2014. She is head of the ESF project The Political Economy of the European Banking Union since 2017. In 2019 she joined the SUERF Research Affiliate programme. Her research focuses on banking and sovereign debt crises, integration of financial markets, and banking regulation.

Lena Tonzer received her bachelor's and master's degree from University of Tübingen, and her PhD from European University Institute (EUI) in Florence, Italy. From 2017 to 2021 she taught at Martin Luther University Halle-Wittenberg.

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Professor Dr Lena Tonzer
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Publications

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Financial Linkages and Sectoral Business Cycle Synchronization: Evidence from Europe

Hannes Böhm Julia Schaumburg Lena Tonzer

in: IMF Economic Review, December 2022

Abstract

We analyze whether financial integration leads to converging or diverging business cycles using a dynamic spatial model. Our model allows for contemporaneous spillovers of shocks to GDP growth between countries that are financially integrated and delivers a scalar measure of the spillover intensity at each point in time. For a financial network of ten European countries from 1996 to 2017, we find that the spillover effects are positive on average and much larger during periods of financial stress, pointing towards stronger business cycle synchronization. Dismantling GDP growth into value added growth of ten major industries, we observe that spillover intensities vary significantly. The findings are robust to a variety of alternative model specifications.

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Completing the European Banking Union: Capital Cost Consequences for Credit Providers and Corporate Borrowers

Michael Koetter Thomas Krause Eleonora Sfrappini Lena Tonzer

in: European Economic Review, September 2022

Abstract

The bank recovery and resolution directive (BRRD) regulates the bail-in hierarchy to resolve distressed banks in the European Union (EU). Using the staggered BRRD implementation across 15 member states, we identify banks’ capital cost responses and subsequent pass-through to borrowers towards surprise elements due to national transposition details. Average bank capital costs increase heterogeneously across countries with strongest funding cost hikes observed for banks located in GIIPS and non-EMU countries. Only banks in core E(M)U countries that exhibit higher funding costs increase credit spreads for corporate borrowers and contract credit supply. Tighter credit conditions are only passed on to more levered and less profitable firms. On balance, the national implementation of BRRD appears to have strengthened financial system resilience without a pervasive hike in borrowing costs.

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A Note of Caution on Quantifying Banks' Recapitalization Effects

Felix Noth Kirsten Schmidt Lena Tonzer

in: Journal of Money, Credit and Banking, No. 4, 2022

Abstract

Unconventional monetary policy measures like asset purchase programs aim to reduce certain securities' yield and alter financial institutions' investment behavior. These measures increase the institutions' market value of securities and add to their equity positions. We show that the extent of this recapitalization effect crucially depends on the securities' accounting and valuation methods, country-level regulation, and maturity structure. We argue that future research needs to consider these factors when quantifying banks' recapitalization effects and consequent changes in banks' lending decisions to the real sector.

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Working Papers

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Firm Subsidies, Financial Intermediation, and Bank Stability

Aleksandr Kazakov Michael Koetter Mirko Titze Lena Tonzer

in: IWH Discussion Papers, No. 24, 2022

Abstract

We use granular project-level information for the largest regional economic development program in German history to study whether government subsidies to firms affect the quantity and quality of bank lending. We combine the universe of recipient firms under the Improvement of Regional Economic Structures program (GRW) with their local banks during 1998-2019. The modalities of GRW subsidies to firms are determined at the EU level. Therefore, we use it to identify bank outcomes. Banks with relationships to more subsidized firms exhibit higher lending volumes without any significant differences in bank stability. Subsidized firms, in turn, borrow more indicating that banks facilitate regional economic development policies.

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A Note on the Use of Syndicated Loan Data

Isabella Müller Felix Noth Lena Tonzer

in: IWH Discussion Papers, No. 17, 2022

Abstract

Syndicated loan data provided by DealScan has become an essential input in banking research over recent years. This data is rich enough to answer urging questions on bank lending, e.g., in the presence of financial shocks or climate change. However, many data options raise the question of how to choose the estimation sample. We employ a standard regression framework analyzing bank lending during the financial crisis to study how conventional but varying usages of DealScan affect the estimates. The key finding is that the direction of coefficients remains relatively robust. However, statistical significance seems to depend on the data and sampling choice.

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Cultural Norms and Corporate Fraud: Evidence from the Volkswagen Scandal

Iftekhar Hasan Felix Noth Lena Tonzer

in: IWH Discussion Papers, No. 24, 2020

Abstract

We investigate whether cultural norms shaped by religion drive consumer decisions after a corporate scandal. We exploit the notice of violation by the US Environmental Protection Agency in September 2015 accusing Volkswagen (VW) of using software to manipulate car emission values during test phases. We show that new registrations of VW cars decline significantly in German counties with a high share of Protestants following the VW scandal. Our findings document that the enforcement culture in Protestantism facilitates penalising corporate fraud. We corroborate this channel with a survey documenting that Protestants respond significantly different to fraud but not to environmental issues.

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Keywords

Brexit Regulation Monetary Policy Financial Institutions Financial Markets The new Europe Risk Financial Stability Policy Evaluation
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