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Regulatory loan ceilings are commonly found in the prosocial lending sector, yet they can have unintended perverse effects. By mitigating the risk of adverse selection, loan caps catalyze co-financing arrangements between subsidized lenders and commercial banks. These arrangements can, in turn,...
Persistent link: https://www.econbiz.de/10013246101
This paper examines consistency in the estimates of probability of default (PD) and loss given default (LGD) that nine large U.S. banks assign to syndicated loans for regulatory capital purposes. Using internal bank data on loans that had PDs and LGDs assigned by more than one bank, we find...
Persistent link: https://www.econbiz.de/10013061902
Using a proprietary database from a large Chinese state-owned bank, we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms. We find that the bank's relationship information is significantly linked to the incidence of default, and...
Persistent link: https://www.econbiz.de/10013063634
The development of credit information sharing schemes in developing countries has gained significant attention in … credit information sharing on credit intermediation cost in these countries, and consequently ascertain the extent to which … the credit information sharing–credit intermediation cost nexus may be accentuated by banking market concentration and …
Persistent link: https://www.econbiz.de/10012830548
Financial technology (FinTech) companies are increasingly important in the financial system. We investigate the effect of peer-to-peer (P2P) lending on traditional banks' loan losses by examining whether and how P2P lending activity in a state affects loan loss provisions of that state's...
Persistent link: https://www.econbiz.de/10012831762
Using detailed data of all German banks, we find that banks which have suffered heavy credit losses reduce their … assumption of constant leverage. Weakly capitalized banks grant fewer new loans than other banks. We control for credit demand …
Persistent link: https://www.econbiz.de/10013313540
We investigate whether government credit guarantee schemes, extensively used after the onset of the Covid-19 pandemic …, led to substitution of non-guaranteed with guaranteed credit rather than fully adding to the supply of lending. We study … this issue using a unique euro-area credit register data, matched with supervisory bank data and establish two main …
Persistent link: https://www.econbiz.de/10013313702
regulatory reform which allowed unlisted firms to issue minibonds. Using the Italian Credit Register, we compare new loans … power with banks. Issuer firms also reduce the amount of used bank credit, expand their total and fixed assets, and raise …
Persistent link: https://www.econbiz.de/10012419623
How much of the heterogeneity in bank loan pricing is explained by disparities in banks' attitude towards risk? The answer to this question is not simple because there are only very weak proxies for gauging the degree of a bank's risk aversion. We handle this constraint by means of a novel...
Persistent link: https://www.econbiz.de/10012420270
We investigate the impact of the 2014 Interagency Clarification on the leverage risk premium for bank- and nonbank-originated loans. Using a novel dataset from 2011 to 2019, we show that leveraged loan spreads have declined rapidly for nonbank facilities relative to bank facilities since the...
Persistent link: https://www.econbiz.de/10012420989