We use bank-, loan- and firm-level data together with a quasi-natural experiment to estimate the impact of capital requirement reductions on bank lending and real economic outcomes. We find that capital requirement reductions increase lending both to households and firms at the bank- and...

Concerns regarding social and environmental issues have become a pervasive aspect of economic relationships, prompting banks' role in social-environmental sustainability to occupy a growing share in the economic debate. Nevertheless, what is the relationship between bank behavior and sustainable...