Bank Funding, Securitization and Loan Terms: Evidence from Foreign Currency Lending
University of St. Gallen, Swiss Institute of Banking and Finance
Aalto University School of Business
Tilburg University - CentER, European Banking Center (EBC); Centre for Economic Policy Research (CEPR)
April 17, 2013
European Banking Center Discussion Paper No. 2009-21
CentER Discussion Paper Series No. 2009-78
We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique dataset that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization.
Number of Pages in PDF File: 55
Keywords: foreign currency debt, banking
JEL Classification: G21, G3, F34, F37working papers series
Date posted: October 7, 2009 ; Last revised: May 5, 2013
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