Dr Thomas Krause

Dr Thomas Krause
Current Position

since 7/21

Research Affiliate

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

since 8/21

Research Economist

Danmarks Nationalbank

Research Interests

  • financial stability and banking regulation
  • political economy of banking
  • household finance and the housing market

Thomas Krause joined the institute as a Research Affiliate in July 2021. His research focuses on financial stability, banking regulation, and the interaction between financial frictions and aggregate economic activity.

Thomas Krause holds the position of research economist at Danmarks Nationalbank. He earned his bachelor's and master's degree from Leipzig University and received his PhD from Otto von Guericke University Magdeburg.

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Publications

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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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Delay Determinants of European Banking Union Implementation

Michael Koetter Thomas Krause Lena Tonzer

in: European Journal of Political Economy, 2019

Abstract

Most countries in the European Union (EU) delay the transposition of European Commission (EC) directives, which aim at reforming banking supervision, resolution, and deposit insurance. We compile a systematic overview of these delays to investigate if they result from strategic considerations of governments conditional on the state of their financial, regulatory, and political systems. Transposition delays pertaining to the three Banking Union directives differ considerably across the 28 EU members. Bivariate regression analyses suggest that existing national bank regulation and supervision drive delays the most. Political factors are less relevant. These results are qualitatively insensitive to alternative estimation methods and lag structures. Multivariate analyses highlight that well-stocked deposit insurance schemes speed-up the implementation of capital requirements, banking systems with many banks are slower in implementing new bank rescue and resolution rules, and countries with a more intensive sovereign-bank nexus delay the harmonization of EU deposit insurance more.

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Drivers of Systemic Risk: Do National and European Perspectives Differ?

Claudia M. Buch Thomas Krause Lena Tonzer

in: Journal of International Money and Finance, March 2019

Abstract

With the establishment of the Banking Union, the European Central Bank has been granted the power to impose stricter regulations than the national regulator if systemic risks are not adequately addressed at the national level. We ask whether there is a cross-border externality in the sense that a bank’s systemic risk differs when applying a national versus a European perspective. On average, banks’ contribution to systemic risk is similar at the two regional levels, and so is the ranking of banks. Generally, larger banks and banks with a lower share of loans are more systemically important. The effects of these variables are qualitatively but not quantitatively similar at the national versus the European level.

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Working Papers

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Lender-specific Mortgage Supply Shocks and Macroeconomic Performance in the United States

Franziska Bremus Thomas Krause Felix Noth

in: IWH Discussion Papers, No. 3, 2021

Abstract

This paper provides evidence for the propagation of idiosyncratic mortgage supply shocks to the macroeconomy. Based on micro-level data from the Home Mortgage Disclosure Act for the 1990-2016 period, our results suggest that lender-specific mortgage supply shocks affect aggregate mortgage, house price, and employment dynamics at the regional level. The larger the idiosyncratic shocks to newly issued mortgages, the stronger are mortgage, house price, and employment growth. While shocks at the level of shadow banks significantly affect mortgage and house price dynamics, too, they do not matter much for employment.

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Bank-specific Shocks and House Price Growth in the U.S.

Franziska Bremus Thomas Krause Felix Noth

in: IWH Discussion Papers, No. 3, 2017

Abstract

This paper investigates the link between mortgage supply shocks at the banklevel and regional house price growth in the U.S. using micro-level data on mortgage markets from the Home Mortgage Disclosure Act for the 1990-2014 period. Our results suggest that bank-specific mortgage supply shocks indeed affect house price growth at the regional level. The larger the idiosyncratic shocks to newly issued mortgages, the stronger is house price growth. We show that the positive link between idiosyncratic mortgage shocks and regional house price growth is very robust and economically meaningful, however not very persistent since it fades out after two years.

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