Syndicated Loan Market and Banks' Distant Lending

Glaser, Jack; Santos, João A. C.

doi:10.2139/ssrn.3991670

Cited by 1 publication

(1 citation statement)

References 27 publications

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“…For example, according to Pennacchi ( 1988 ) and Gorton and Pennacchi ( 1995 ), if banks anticipate that they will not retain an exposure to the loans they originate, then banks will lose their incentives to screen loan applicants and to monitor borrowers during the life of the loan. However, several studies, including Plosser and Santos ( 2018 ), Blickle et al ( 2020 ), and Glaser and Santos ( 2021 ), do not find supporting evidence to the thesis that the lead share proxies for the lead bank’s monitoring incentives. Our results show that the lead share plays a part in the liquidity of a loan, depending on whether the lead bank also acts as a dealer for the loan.…”

Section: Final Remarksmentioning

confidence: 98%

Investor Diversity and Liquidity in The Secondary Loan Market

Santos

Shao

2022

J Financ Serv Res

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We find strong evidence that investor diversity is beneficial to loan liquidity: More diverse syndicates, as measured by the number of investor-types or the concentration of loan shares by investor-type, hold loans that have lower quoted bid-ask spreads in the secondary market. These results are robust, and do not appear to be driven by investors’ borrower/loan selection. Further, they are not driven by the presence of any particular type of investors. Our findings are consistent with Goldstein and Yang (J Financ 70:1723–1765 2015 ) insight that there is a strategic complementarity between different groups in trading on their information and producing information.

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