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…
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15th Annual IWH-CompNet Conference
15th Annual IWH-CompNet Conference 22-23 October 2026 - Brussels, Belgium Center for Business and Productivity Dynamics – CompNet, the Halle Institute for Economic Research, and…
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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…
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IWH-DPE in a Nutshell
IWH-DPE in a Nutshell The IWH Doctoral Programme in Economics (IWH-DPE) is the unit that organises the education of doctoral students at the IWH in close cooperation with partner…
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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…
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Do Euro Area Banks Adjust Their Foreign Real Estate Backed Lending in a Low Interest Rate Environment?
Kirsten Schmidt, Lena Tonzer
SUERF Policy Brief,
February
2025
Abstract
Banks have been operating in a low interest rate environment paired with booming housing markets. For the largest banks in the euro area and the period 2015-2022, we assess whether banks reallocate their foreign loan portfolio backed by real estate as a response to differences in local lending spreads across the home and destination country and conditional on reduced information frictions due to borrowing-country exposures. The main result is that the relative share of foreign real estate backed lending increases in case of return opportunities, and this sensitivity depends on local exposures towards the borrowing country. The result is driven by subsamples for which neither the home nor the borrowing country have implemented macroprudential regulation targeting real estate lending, or for which there is a misalignment in macroprudential policies. Nevertheless, we find limited evidence that the riskiness of real estate backed loans goes up during our sample period, and we discuss potential reasons for this result including the possibility of hidden losses.
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Organisation of Research
Tasks of the IWH Guided by its mission statement , the IWH places the understanding of the determinants of long term growth processes at the centre of the research agenda. Long…
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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…
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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,…
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The Network
About IWH CompNet The Competitiveness Research Network (CompNet) is a leading European research initiative dedicated to advancing the understanding of competitiveness and…
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