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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Abstract
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 |
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Original Title: | The crisis as a wake-up call. Do banks tighten lending standards during a financial crisis? |
Language: | English |
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 |
Item ID: | 16382 |
Depositing User: | Neeltje Van Horen |
Date Deposited: | 22 Jul 2009 05:35 |
Last Modified: | 28 Sep 2019 07:58 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/16382 |
Available Versions of this Item
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The strategic behavior of banks during a financial crisis; evidence from the syndicated loan market. (deposited 19 Mar 2009 05:32)
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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 increase screening and monitoring during a financial crisis? (deposited 06 May 2009 00:04)
- The crisis as a wake-up call. Do banks tighten lending standards during a financial crisis? (deposited 22 Jul 2009 05:35) [Currently Displayed]
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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)
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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)