Search Results
Journal Article
Off-balance sheet banking
Conference Paper
Banks and loan sales: evidence of implicit contracts
Working Paper
How Do Lead Banks Use Their Private Information about Loan Quality in the Syndicated Loan Market?
We formulate and test two opposing hypotheses about how lead banks in the syndicated loan market use private information about loan quality, the Signaling Hypothesis and Sophisticated Syndicate Hypothesis. We use Shared National Credit (SNC) internal loan ratings made comparable using concordance tables to measure private information. We find favorable private information is associated with higher lead bank loan retention and lower interest rate spreads for pure term loans, ceteris paribus, supporting the Signaling Hypothesis. Neither hypothesis dominates for pure revolvers. The data ...
Conference Paper
Public policy and the evolution of banking markets
Working Paper
The Secondary Market for Syndicated Loans
We document an active secondary market for shares in syndicated term loans using confidential supervisory data. While most of the literature examines trades near origination, this paper is the first to study the secondary market throughout the life cycle of a syndicated term loan. We establish novel empirical facts about the post-origination trading of loan shares and identify key participants and their trading patterns. We characterize the determinants of an active secondary market, the turnover of lender shares, and the resulting credit exposure allocations. Increased non-bank participation ...
Conference Paper
The paradox of loan sales