We demonstrate a link between the twin storms underlying the current financial crisis - the market for collateralized debt obligations (CDOs) and the market for leveraged loans. We show that structural changes in credit markets that led to the explosion in CDOs created an increased supply of...

We study how lender-shareholder distance affects loan contract terms. We hypothesize that an increase in lender-shareholder distance aggravates the lender's information asymmetry vis-à-vis shareholders by making it difficult to observe shareholders' risk preferences and their influence on...

We study how trust held by citizens of a lender country towards citizens of a borrower country (“lenders’ generalized trust”) affects pricing and non-pricing terms of international syndicated loans. We find that generalized trust of a lead bank in the syndicated loans reduces loan spreads...