We find some support for theories predicting that the presence of informed investors adversely affects liquidity: When arrangers retain a share in the loan this impacts negatively liquidity. We find strong evidence that investor diversity is beneficial to liquidity: Loans with larger syndicates;...

In this paper, we introduce a model to study the interaction between insurance and banking. We build on the Federal Crop Insurance Act of 1980, which significantly expanded and restructured the decades-old federal crop insurance program and adverse weather shocks - over-exposure of crops to heat...

In this paper, we introduce a model to study the interaction between insurance and banking. We build on the Federal Crop Insurance Act of 1980, which significantly expanded and restructured the decades-old federal crop insurance program and adverse weather shocks - over-exposure of crops to heat...

We investigate how the introduction of market-based pricing, the practice of tying loan interest rates to credit default swaps, has affected bank financing. We find that market-based pricing is associated with lower interest rates, both at origination and during the life of the loan. Our results...

Combining deposit taking with credit line provision saves on the liquidity costs banks incur to meet the liquidity needs of consumers and corporations, but it exposes them to a risk of concurrent runs on their assets and liabilities. If a bank's financial condition deteriorates, depositors have...

To what extent have U.S. banks adopted the originate-to-distribute model in their corporate lending business? According to our findings, banks have increasingly used the originate-to-distribute model in their term-loan business since the early 1990s. However, they have continued to rely on the...

We investigate whether the securitization of corporate loans affected banks' lending standards. We find that during the boom years of the CLO business, loans sold to CLOs at the time of their origination underperform matched unsecuritized loans originated by the same bank. This finding is robust...

In this paper, we show that when banks increase their use of wholesale funding they shorten the maturity of loans to corporations. This effect appears to be linked to banks' exposure to rollover risk resulting from their increasing use of short-term uninsured funding. Banks that use more...

We document that the structure of syndicates affects term loan renegotiations. Lead banks with large retained shares have a positive effect on renegotiations, while the syndicate diversity among nonbank investors is renegotiation friendly. The latter result derives from the growth of...

We document that the structure of syndicates affects loan renegotiations. Lead banks with large retained shares have positive effects on renegotiations. In contrast, more diverse syndicates deter renegotiations, but only for credit lines. The former result can be explained with coordination...