BanK Lending Research Papers - Academia.edu (original) (raw)

We empirically identify factors that can explain the financial performance of bank lending activities. We also analyze the individual bank’s evaluation of a loan’s risk. We use our results to test theoretical hypotheses on the impact of... more

We empirically identify factors that can explain the financial performance of bank lending
activities. We also analyze the individual bank’s evaluation of a loan’s risk. We use our
results to test theoretical hypotheses on the impact of certain parameters on credit terms
and distress probabilities. We find ratings act as an important factor in the bank’s lending
policy. Ratings reflecting higher risks lead to higher interest rate premia. The findings on
collateralization are less clear and do not fully support any of hypotheses that are
advanced to describe the role of collateral and covenants in credit contracts.

Using a worldwide bank sample from 2000 to 2010, this article analyzes the determinants of bank lending behavior during the global financial crisis highlighting the role of bank capital. It reveals that the high quality of the bank... more

Using a worldwide bank sample from 2000 to 2010, this article analyzes the determinants of bank lending behavior during the global financial crisis highlighting the role of bank capital. It reveals that the high quality of the bank funding strategy (tier 1 bank capital and retail deposits) and prevalent government backing were crucial to continuous bank lending during the crisis period. This effect was especially pronounced in non-OECD and BRIC countries. We also point out that, although higher use of tier 2 capital and interbank deposits could be important for increased lending during a normal period, this did not support lending activities during the financial crisis. The article concludes by suggesting that in crisis periods high-quality bank capital is a bank’s competitive strength.

This study examines the impact of bank credit to the private sector on economic growth in Bangladesh from supply side perspectives. The study has applied Johansen co-integration approach and Error Correction Model using... more

This study examines the impact of bank credit to the private sector on economic growth in Bangladesh from supply side perspectives. The study has applied Johansen co-integration approach and Error Correction Model using the time series data for the period of 1980-2015. Based on the sample data and methodology, we found that there is a positive long run relationship between real private sector credit and real GDP. More specifically private sector credit can alone explain 40 percent of variation of GDP in the long run in Bangladesh. But in short run, real GDP adjusts toward the equilibrium path once the system is shocked. However, in the short run, the adjustment path of real private sector credit to maintain the long run relationship is somewhat opposite towards equilibrium. This means that in the short run, changes in real private sector credit cannot contribute positively to restore the long run relationship if there is an imbalance in the system. So, private sector credit should be considered cautiously and given priority to productive sectors as unnecessary or unproductive credit to private sector unable to play

For more than a century, and almost everywhere in the world, rural areas suff ered a steady decline, due to the decrease of the real income from the agricultural activities, the lack of serious economic alternatives, and demographic... more

For more than a century, and almost everywhere in the world, rural areas suff ered a steady decline, due to the decrease
of the real income from the agricultural activities, the lack of serious economic alternatives, and demographic issues.
Rural tourism could contribute to the rural sustainable development through small local businesses valorising the natural,
cultural and ethnographic resources. However, most of them need the fi nancial support from private creditors (banks). Th e
survey-based research conducted among banks’ representatives has identifi ed several strengths of small rural ventures, such
as the small scale and the associated risks, the endurance to external shocks, the openness to market opportunities, as well
as some of their weaknesses: e.g. a poor management experience, seasonality etc. We have also identifi ed the actions necessary
to be performed by these fi rms to attract fi nancial resources from the banks’ side, i.e. the diversifi cation of income
sources, the association and the adherence to recognized brands and maintaining a reasonable leverage ratio. It was found
that the bank’s size does not matter, but the nature of the bank’s capital does: the private domestic banks are more willing to
fi nance such businesses. Th e banks’ involvement in co-fi nancing the EU projects could be a way to foster and strengthen the
rural businesses.

The 'globalization' of economic activity and the governance issues it raises are often thought to have appeared only after the Second World War, and particularly during the 1960s. The post-1960s era saw the emergence of MNC... more

The 'globalization' of economic activity and the governance issues it raises are often thought to have appeared only after the Second World War, and particularly during the 1960s. The post-1960s era saw the emergence of MNC activity on the one hand and the rapid growth of international trade on the other. Subsequently, with the col- lapse of the Bretton Woods semi-fixed exchange rate regime in the 1971-3 period, the expansion of international securities investment and bank lending began in earnest as capital and particularly money markets rapidly internationalized, adding to the com- plexity of international economic relations and heralding what is often thought to be the genuine globalization of an integrated and interdependent world economy. In this chapter we scrutinize this popular history and trace the main periods of the inter- nationalization of economic activity, which will be shown to have developed in a cyclical and uneven fashion. The key issue at stake in our a...

The Centre for Planning and Economic Research (KEPE) was established as a research unit, under the title “Centre of Economic Research”, in 1959. Its primary aims were the scientific study of the problems of the Greek economy, the... more

The Centre for Planning and Economic Research (KEPE) was established as a research unit, under the title “Centre of Economic Research”, in 1959. Its primary aims were the scientific study of the problems of the Greek economy, the encouragement of economic research ...

The main purpose of this paper is to investigate the aggregate data about bank loans which may hide significant information about the monetary transmission mechanism. This study, by disaggregating bank loans data and using the relevant... more

The main purpose of this paper is to investigate the aggregate data about bank loans which may hide significant information about the monetary transmission mechanism. This study, by disaggregating bank loans data and using the relevant interest rates in Sweden, investigates the behaviour of banks after a monetary policy tightening. By using an unrestricted VAR model and impulse response analysis, our results show that a shock on the policy rate affects the main components of the banks’ loan portfolios differently. Initially, banks do not reduce lending to firms and households and they present a sluggish reaction concerning the relevant interest rates. On the contrary, they reduce lending to mortgage credit institutions significantly since real estate lending can be considered as a risky long-term investment. Moreover mortgage credit institutions reduce lending for housing purposes to non-bank public. This reduction is mainly driven by flexible rate loans and loans secured on tenant owned apartments. Consequently, theses actions have a significant effect on real economic activity, by amplifying the initial shock from the tightening monetary policy. The latter result provides evidence of the bank lending channel in Sweden working via mortgage lending and could be very important for policy makers.

This paper uses a unique UK data set of small to medium sized private companies,to analyse how banks restructure distressed firms. The typical debt structure consists of one senior lender (a bank) and a large number,of unsecured trade... more

This paper uses a unique UK data set of small to medium sized private companies,to analyse how banks restructure distressed firms. The typical debt structure consists of one senior lender (a bank) and a large number,of unsecured trade creditors who togetherwith the bank provide about 80% of the company’s total borrowings. The paper addresses three important

This paper provides a systematic empirical study of the role of credit market frictions in the transmission of monetary shocks. First, using macro data for a developing economy (Pakistan), we show that banking spreads are countercyclical,... more

This paper provides a systematic empirical study of the role of credit market frictions in the transmission of monetary shocks. First, using macro data for a developing economy (Pakistan), we show that banking spreads are countercyclical, even when we control for credit risk, monetary policy and potential maturity mismatches. Moreover, we find that this anticyclical nature is accentuated in the

Abstract: In this paper we investigate how country shareholding arrangements affect the lending of multilateral development banks (MDBs) under different economic conditions and over time. To do so, we consider three different “types” of... more

Abstract: In this paper we investigate how country shareholding arrangements affect the lending of multilateral development banks (MDBs) under different economic conditions and over time. To do so, we consider three different “types” of MDBs—one dominated by non-...