Merrino, Serena;
Lesame, Keagile;
Chondrogiannis, Ilias;
(2025)
Has Macroprudential Regulation Affected Marginal Borrowers? Evidence From South Africa.
South African Journal of Economics
10.1111/saje.12399.
(In press).
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Abstract
Bank regulation aimed at strengthening the resilience of the financial system can also prompt adjustments in lending and borrowing decisions. This paper examines how South Africa's credit market has responded to macroprudential policy measures to evaluate whether financial stability objectives are achieved at the expense of an equitable credit allocation. Using firm‐level tax data, banking sector time series and a comprehensive regulatory index, we find that Basel III reforms reduced lending to households, especially if poor, to the benefit of firms, especially if large. We also document that regulation triggers lenders' adverse selection by penalising more creditworthy enterprises.
| Type: | Article |
|---|---|
| Title: | Has Macroprudential Regulation Affected Marginal Borrowers? Evidence From South Africa |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1111/saje.12399 |
| Publisher version: | https://doi.org/10.1111/saje.12399 |
| Language: | English |
| Additional information: | © 2025 The Author(s). The South African Journal of Economics published by John Wiley & Sons Ltd on behalf of Economic Society of South Africa. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License (http://creativecommons.org/licenses/by-nc-nd/4.0/). |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of Arts and Humanities |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10204734 |
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