How do lead banks use their private information about loan quality in the syndicated loan market?

Balasubramanyan, Lakshmi; Berger, Allen N.; Koepke, Matthew

doi:10.1016/j.jfs.2019.03.006

Cited by 18 publications

(9 citation statements)

References 48 publications

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“…12 Other papers that have used these novel regulatory data are Abdymomunov (2014) (operational losses), Black, Krainer, and Nichols (2016), Johnson and Sarama (2015), Epouhe and Hall (2016), Calem and Sarama (2016) (real estate) and, making limited use of the corporate loans data to assess the use of private information by syndicate leaders, Balasubramanyan, Berger, Bouwman, and Koepke (2016). For contemporaneous work making use of only the corporate loan data available in the Y14 see Berrospide and Edge (2016) and Luck and Zimmermann (2018).…”

Section: Datamentioning

confidence: 99%

De-leveraging or de-risking? How banks cope with loss

Bidder

Krainer

Shapiro

2021

Review of Economic Dynamics

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We use variation in banks' loan exposure to industries adversely affected by the oil price declines of 2014 to explore how they respond to a net worth shock. Using granular data obtained under the Fed's stress testing programs we show that exposed banks tightened credit on corporate lending and on mortgages that they would ultimately hold on their balance sheet. However, they expanded credit for mortgages to be securitized, particularly those that are government-backed. Thus, banks re-balance their portfolio so as to lower their average risk weight, rather than scaling back the size of their balance sheet, as looking at on-balance-sheet corporate or residential lending alone would suggest. These results show the importance of taking a cross-balance sheet perspective when examining bank behavior. In addition, in terms of the ultimate 'credit channel' to firms and households, we show precisely how borrowers substitute to alternative financing when banks they initially borrow from tighten credit. In showing that there was ultimately a minimal impact on borrowers' overall funding, we provide a benchmark for crisis-period studies, which typically find a powerful credit channel effect.

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Section: Datamentioning

confidence: 99%

De-leveraging or de-risking? How banks cope with loss

Bidder

Krainer

Shapiro

2021

Review of Economic Dynamics

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“…A financial transaction is defined as any action that exchanges or substitutes financial capital for others with different maturities [31,46]. Most of the works devoted to the study of financial mathematics analyze financial transactions and the risks associated with them [35,47].…”

Section: Financial Transactionsmentioning

confidence: 99%

“…How do lead banks use their private information about loan quality in the syndicated loan market? [31] Likewise, the criteria used to select the articles in Table 1 were for carrying out a literature review of the research topic. The main articles allowed us to formulate the research question, and later, both the purpose and the main objective of this study.…”

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confidence: 99%

Global Research Trends in Financial Transactions

Abad-Segura

González-Zamar

2020

Mathematics

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Traditionally, financial mathematics has been used to solve financial problems. With globalization, financial transactions require new analysis based on tools of probability, statistics, and economic theory. Global research trends in this topic during the period 1935–2019 have been analyzed. With this objective, a bibliometric methodology of 1486 articles from the Scopus database was applied. The obtained results offer data on the scientific activity of countries, institutions, authors, and institutions that promote this research topic. The results reveal an increasing trend, mainly in the last decade. The main subjects of knowledge are social sciences and economics, econometrics, and finance. The author with the most articles is Khare from the Indian Institute of Management Rohtak. The most prolific affiliation is the British University of Oxford. The country with the most academic publications and international collaborations is the United States. In addition, the most used keywords in articles are “financial management”, “financial transaction tax”, “banking”, “financial service”, “blockchain”, “decision making”, and “financial market”. The increase in publications in recent years at the international level confirms the growing trend in research on financial transactions.

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“…According to Aslakka and ap Gwylim (2010), S&P is the most independent rating agency, and although Moody’s is usually the first to make upgrades, S&P is the first to make downgrades. Additionally, S&P makes rating changes most frequently, which suggests that its ratings may reflect more current information and that they are not anticipated by the market (Gande and Parsley 2005; Correa et al 2012, Balasubramanyan et al ., 2019). Therefore, we collected data on all ratings‐related announcements made by S&P between 1 January 2001 and 15 August 2012.…”

Section: Datamentioning

confidence: 99%

The Dilemma of International Diversification: Evidence from the European Sovereign Debt Crisis

Hasan

Kostova

Naceur

2020

Asia-Pac J of Fin Stud

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This paper tests how capital markets value the international diversification of banks in good and in bad economic times by investigating changes in domestic and foreign sovereign debt ratings before and during the European sovereign debt crisis. Tracing 320 European banks in 29 countries and 226 credit rating announcements for European sovereigns between 1 January 2001 and 15 August 2012, we show that the market values banks with access to foreign funds. Despite occasional adverse effects immediately following negative news regarding sovereign credit rating changes, international diversification was found to be beneficial to European banks, especially during periods of distress.

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How do lead banks use their private information about loan quality in the syndicated loan market?

Cited by 18 publications

References 48 publications

De-leveraging or de-risking? How banks cope with loss

De-leveraging or de-risking? How banks cope with loss

Global Research Trends in Financial Transactions

The Dilemma of International Diversification: Evidence from the European Sovereign Debt Crisis

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