de Haas, Ralph and van Horen, Neeltje (2009): The crisis as a wake-up call. Do banks tighten screening and monitoring standards during a financial crisis?
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We examine whether the global financial crisis has prompted banks to take corrective action with regard to their screening and monitoring. By analyzing almost 15,000 syndicated loans to private borrowers across 65 countries over the period 2005-2009, we find that banks stepped up their screening and monitoring efforts in response to the crisis. This is evidenced by a significant increase in retention rates among syndicate arrangers. These higher retention rates (‘more skin in the game’) were only partially caused by increased borrower risk. They mainly reflect a more fundamental shift towards more stringent screening and monitoring during the crisis: the wake-up call effect.
|Item Type:||MPRA Paper|
|Original Title:||The crisis as a wake-up call. Do banks tighten screening and monitoring standards during a financial crisis?|
|Keywords:||bank lending; financial crisis; retention rates; screening and 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:||20. Oct 2009 09:01|
|Last Modified:||14. Mar 2015 01:53|
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Available Versions of this Item
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The crisis as a wake-up call. Do banks increase screening and monitoring during a financial crisis? (deposited 15. Apr 2009 00:14)
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- The crisis as a wake-up call. Do banks tighten lending standards during a financial crisis? (deposited 22. Jul 2009 05:35)
- 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)