de Haas, Ralph and van Horen, Neeltje (2009): The crisis as a wake-up call. Do banks tighten lending standards during a financial crisis?
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We examine whether the global financial crisis has prompted banks to tighten lending standards. By analyzing nearly 31,000 syndicated loans to private borrowers in 65 countries over the period 2005-2009, we find that banks not only cut lending during a crisis but also increase their screening and monitoring. Lending standards are tightened in particular for uncollateralized loans, loans to first-time borrowers, and financial-sector borrowers in developed countries. While in developed countries screening and monitoring increases less for loans to rated borrowers and for loans structured by well-known arrangers, we show that the attenuating impact of credit ratings and arranger reputation does not extend to emerging markets.
|Item Type:||MPRA Paper|
|Original Title:||The crisis as a wake-up call. Do banks tighten lending standards during a financial crisis?|
|Keywords:||bank lending; financial crisis; asymmetric information; screening; monitoring; syndication|
|Subjects:||G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
|Depositing User:||Neeltje Van Horen|
|Date Deposited:||22. Jul 2009 05:35|
|Last Modified:||14. Feb 2013 02:50|
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Available Versions of this Item
The strategic behavior of banks during a financial crisis; evidence from the syndicated loan market. (deposited 19. Mar 2009 05:32)
The crisis as a wake-up call. Do banks increase screening and monitoring during a financial crisis? (deposited 15. Apr 2009 00:14)
The crisis as a wake-up call. Do banks increase screening and monitoring during a financial crisis? (deposited 06. May 2009 00:04)
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- The crisis as a wake-up call. Do banks increase screening and monitoring during a financial crisis? (deposited 06. May 2009 00:04)
- The crisis as a wake-up call. Do banks increase screening and monitoring during a financial crisis? (deposited 15. Apr 2009 00:14)