This paper examines the mechanisms underlying the policy implications of open banking frameworks. The data-sharing policy in financial intermediaries aims to alleviate friction in information asymmetry and promote financial innovation by enhancing market competition and data portability. This study uses a difference in differences approach to explore the impact of adopting open banking on traditional
financial intermediaries in the European syndicated loan market. The results reveal a discrepancy across the policy intervention phases. Specifically, the introduction of open banking frameworks leads to a significant reduction in loan interest rates without affecting collateral. However, the regulatory fragmentation in enforcing data-sharing policies and the specific characteristics of syndicated loans limit the positive effects of data portability and interoperability competition. This finding underscores the crucial role of regulators in establishing financial innovation policies and emphasises how private information continues to play a significant role in the syndicated structure.

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