This paper analyses the role of collateral in loan contracting when companies are financed by multiple bank lenders and … the view that collateral is a strategic instrument intended to influence the bargaining position of banks. Our result …

lending, borrower quality and collateral as a key variable in loan contract design. We used a unique data set based on the … borrower quality and the incidence or degree of collateralization. Our results indicate that the use of collateral in loan … housebanks do require more collateral from their debtors, thereby increasing the borrower's lock-in and strengthening the banks …