Objective
Banking crises are thought to be recurrent phenomena that generally come on the heels of strong credit growth. Their damaging real effects have generated a broad agreement among academics and policymakers that financial regulation needs to tighten and to obtain a macroprudential dimension that aims to lessen the negative externalities from the financial to the macro real sector.
Among the main ingredients that are often mentioned to have played a role in the explosive growth of credit in the run-up to the latest financial crisis are the financial innovations by financial institutions, in particular loan securitization, the boom in mortgage lending and prices of real estate, the lack of information about prospective borrowers, and the high leverage (and corresponding low capital ratios) of financial institutions.
Yet, despite the singling out of these ingredients by policymakers, decisive empirical evidence about their role and relevancy is lacking. However, given the magnitude and complexity of the global banking system and the lack of encompassing micro-level data, it is currently impossible to confidently study the impact of all ingredients jointly. This project therefore analyses pertinent settings where we can empirically identify the correspondence between the aforementioned individual ingredients and the credit granting by financial institutions.
The objective of the project is to advance identification and estimation of the impact of each respective factor on loan growth by combining the appropriate methodology with an exceptional set of micro-level datasets. When missing in the literature a theoretical framework will be provided. The project further aims to assess how potential combinations of these ingredients may have interacted in spurring credit growth. While the identification of the impact of each ingredient on credit growth is paramount, the individual setting of the studied datasets and employed methodologies will ensure maximum external validity.
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
ERC-ADG - Advanced Grant
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2016-ADG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
8006 Zurich
Switzerland
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.