|
|
|
|
||||
|
||||
Do Information Rents in Loan Spreads Persist over the Business Cycles?Julian A. MattesGoethe University Frankfurt - Department of Finance Sascha SteffenESMT European School of Management and Technology Mark WahrenburgUniversity of Frankfurt - Economics and Business Administration Area February 3, 2012 Journal of Financial Services Research, Forthcoming Abstract: In this paper, we seek empirical evidence for information rents in loan spreads by analyzing a sample of UK syndicated loan contracts for the period from 1996 to 2005. We use various measures for borrower opaqueness and control for bank, borrower and loan characteristics and we find that undercapitalized banks charge approximately 34 bps higher loan spreads for loans to opaque borrowers. We further analyze whether this effect persists throughout the business cycle and find that this effect prevails only during recessions. However, we do not find evidence that banks exploit their information monopolies during expansion phases.
Number of Pages in PDF File: 29 Keywords: Syndicated loans, Hold-up, Lending relationships, Business cycle JEL Classification: G14, G21, G22, G23, G24 Accepted Paper SeriesDate posted: March 3, 2008 ; Last revised: February 8, 2012Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.719 seconds
