European supervisors aggressively requested more capital at large banks. That may cut credit to the economy. We confirm that especially larger banks cut loans while less-significant banks partly offset that credit drop. Moreover, we identify nasty spillovers from that interaction. Specifically,...

European Union countries offer a unique experience of financial regulatory and supervisory integration, complementing various other European integration efforts following the second world war. Financial regulatory and supervisory integration was a very slow process before 2008, despite...