Banks’ foreign homes
Kirsten Schmidt, Lena Tonzer
Deutsche Bundesbank Discussion Papers,
No. 46,
2024
Abstract
Our results reveal that higher lending spreads between foreign and home markets redirect real estate backed lending towards foreign markets offering a higher interest rate, which provides evidence for "search for yield" behavior. This re-allocation is found especially for banks with more expertise on the foreign market due to a higher local activity and holds for commercial and residential real estate backed loans. Furthermore, "search for yield" behavior and a resulting increase in foreign real estate backed lending is found when macroprudential regulation is missing or misaligned between a bank’s country of residence and the destination country. When turning to the question of whether the detected search for yield behavior results in more risk, we find that especially better capitalized banks report higher forbearance ratios as they might face less stigma effects compared to low capitalized banks.
Read article
East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
See page
Management Board and Supervisory Board
Management Board and Supervisory Board As an association established and registered under German civil law the IWH is composed of different internal bodies through which it is led…
See page
Open Calls for PhD Intake
Open Calls for PhD Intake We encourage outstanding students with a Master's degree in economics or related subjects such as mathematics, statistics, business administration,…
See page
Advisory Board
Advisory Board The CompNet Advisory Board is composed of distinguished scholars and leading experts in the fields of productivity, competitiveness, and economic policy, and also…
See page
Research Articles
Research Articles Explore cutting-edge research based on CompNet’s micro-aggregated firm-level data and related analytical tools. These articles cover empirical and theoretical…
See page
Lecturers
Lecturers Lars Börner Professor of Economics at Martin Luther University Halle-Wittenberg. Website Kamila Cygan-Rehm Professor of Quantitative Methods, esp. Econometrics at the…
See page
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) The Centre for Evidence-based Policy Advice (IWH-CEP) of the IWH was founded in 2014. It is a platform that bundles and…
See page
Centre for Business and Productivity Dynamics
Centre for Business and Productivity Dynamics (IWH-CBPD) The Centre for Business and Productivity Dynamics (CBPD) was founded in January 2025 and works with policy and research…
See page
IWH-DPE in a Nutshell
IWH-DPE in a Nutshell Job Market Candidates Candidates from all four IWH departments will enter the academic job market in 2025/2026. Visit our job market page and learn more…
See page
