Seminario Grupo de Investigación ADETRE: "Mutual Funding" (joint with Peter Hoffmann, European Central Bank and Sergio Mayordomo, Banco de España).

Impartido por: Javier Gil-Bazo

Universidad Pompeu Fabra

Lugar: Seminario M1 de la Facultad de Economía y Empresa

Fecha: 15 de mayo de 2019

Hora: 13,00h.

Abstract: Using data on Spanish mutual funds, we show that bank-affiliated funds provide funding support to their parent company via purchases of bonds in the primary market. Funding from affiliated funds increases when it is most valuable, i.e., in times of financial stress and to riskier banks with limited access to funding. Funding support is not limited to bonds but also takes place through bank deposits and purchases of short-term paper. These trades benefit banks at the expense of their affiliated mutual fund investors. To minimize the negative impact on their asset management business, banks steer funding support towards funds without a performance fee and funds that cater to the less-performance sensitive investors. Finally, we provide evidence that the ability to
use affiliated funds as a source of funding enabled Spanish banks to limit credit rationing to the nonfinancial sector during the 2008-2012 period.