Finance Seminar with Bo Becker, Stockholm School of Economics
The Department of Finance is proud to announce the upcoming seminar with Bo Becker, Stockholm School of Economics
Bo Becker will present:
Bo Becker, Stockholm School of Economics
Victoria Ivashina, Harvard University and NBER
By the end of 2013, the share of government debt held by the domestic banking sectors of Eurozone countries was more than twice that held in 2007. Consistent with financial repression, we show that increased government bond holdings generated a crowding out of corporate lending. Firms were more likely to substitute loans with bonds when local banks owned more domestic sovereign debt and when that debt was risky. We show that direct government ownership as well as government influence through banks’ boards of directors are among the channels used to exercise financial repression.