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Professor Dr Lena Tonzer

Professor Dr Lena Tonzer
Current Position

since 9/17

Assistant Professor of the Political Economy of the European Banking Union

Martin Luther University Halle-Wittenberg

since 5/14

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

Head of the International Banking Library

Economist in the Department of Financial Markets

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 Martin Luther University Halle-Wittenberg (ESF project The Political Economy of the European Banking Union) since September 2017 and a member of the Department of Financial Markets at IWH since May 2014. 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.

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Professor Dr Lena Tonzer
Professor Dr Lena Tonzer
Mitglied - Department Financial Markets
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Publications

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Monetary Policy through Exchange Rate Pegs: The Removal of the Swiss Franc‐Euro Floor and Stock Price Reactions

Gregor von Schweinitz Lena Tonzer Manuel Buchholz

in: International Review of Finance, forthcoming

Abstract

The Swiss National Bank abolished the exchange rate floor versus the Euro in January 2015. Using a synthetic matching framework, we analyze the impact of this unexpected (and therefore exogenous) policy change on the stock market. The results reveal a significant level shift (decline) in asset prices following the discontinuation of the minimum exchange rate. As a novel finding in the literature, we document that the exchange‐rate elasticity of Swiss asset prices is around −0.75. Differentiating between sectors of the Swiss economy, we find that the industrial, financial and consumer goods sectors are most strongly affected by the abolition of the minimum exchange rate.

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Do Conventional Monetary Policy Instruments Matter in Unconventional Times?

Manuel Buchholz Kirsten Schmidt Lena Tonzer

in: Journal of Banking and Finance, No. 105874, September 2020

Abstract

This paper investigates how declines in the deposit facility rate set by the ECB affect euro area banks’ incentives to hold reserves at the central bank. We find that, in the face of lower deposit rates, banks with a more interest-sensitive business model are more likely to reduce reserve holdings and allocate freed-up liquidity to loans. The result is driven by banks in the non-GIIPS countries of the euro area. This reveals that conventional monetary policy instruments have limited effects in restoring monetary policy transmission during times of crisis.

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Interactions Between Bank Levies and Corporate Taxes: How is Bank Leverage Affected?

F. Bremus Kirsten Schmidt Lena Tonzer

in: Journal of Banking and Finance, No. 105874, September 2020

Abstract

Regulatory bank levies set incentives for banks to reduce leverage. At the same time, corporate income taxation makes funding through debt more attractive. In this paper, we explore how regulatory levies affect bank capital structure, depending on corporate income taxation. Based on bank balance sheet data from 2006 to 2014 for a panel of EU-banks, our analysis yields three main results: The introduction of bank levies leads to lower leverage as liabilities become more expensive. This effect is weaker the more elevated corporate income taxes are. In countries charging very high corporate income taxes, the incentives of bank levies to reduce leverage turn insignificant. Thus, bank levies can counteract the debt bias of taxation only partially.

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Working Papers

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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: IWH Discussion Papers, No. 4, 2021

Abstract

The bank recovery and resolution directive (BRRD) regulates the bail-in hierarchy to resolve distressed banks without burdening tax payers. We exploit the staggered implementation of the BRRD across 15 European Union (EU) member states to identify banks’ capital cost and capital structure responses. In a first stage, we show that average capital costs of banks increased. WACC hikes are lowest in the core countries of the European Monetary Union (EMU) compared to formerly stressed EMU and non-EMU countries. This pattern is driven by changes in the relative WACC weight of equity in response to the BRRD, which indicates enhanced financial system resilience. In a second stage, we document asymmetric transmission patterns of banks’ capital cost changes on to corporates’ borrowing terms. Only EMU banks located in core countries that exhibit higher WACC are those that also increase firms’ borrowing cost and contract credit supply. Hence, the BRRD had unintended consequences for selected segments of the real economy.

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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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Asymmetric Investment Responses to Firm-specific Forecast Errors

Julian Berner Manuel Buchholz Lena Tonzer

in: IWH Discussion Papers, No. 5, 2020

Abstract

This paper analyses how firm-specific forecast errors derived from survey data of German manufacturing firms over 2007–2011 affect firms’ investment propensity. Understanding how forecast errors affect firm investment behaviour is key to mitigate economic downturns during and after crisis periods in which forecast errors tend to increase. Our findings reveal a negative impact of absolute forecast errors on investment. Strikingly, asymmetries arise depending on the size and direction of the forecast error. The investment propensity declines if the realised situation is worse than expected. However, firms do not adjust investment if the realised situation is better than expected suggesting that the uncertainty component of the forecast error counteracts positive effects of unexpectedly favorable business conditions. Given that the fraction of firms making positive forecast errors is higher after the peak of the recent financial crisis, this mechanism can be one explanation behind staggered economic growth and slow recovery following crises.

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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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