Are Bank Loans Still 'Special' (Especially During a Crisis)? Empirical Evidence from a European Country
Christophe J. Godlewski
LaRGE Research Center (University of Strasbourg); EM Strasbourg Business School; FSESJ - Université de Haute Alsace
February 24, 2012
We investigate bank loans’ specialness with a particular focus on the recent boom and bust cycle. We perform an empirical analysis using event study methodology on a sample of 253 large loan announcements for French borrowers between January 2000 and December 2009. We find a significant and negative reaction to bank loan announcements which is mostly driven by loan provided during the crisis period. We also document significant changes in bank behavior over the boom and bust cycle, with important contractual and organizational modifications reflecting a potential “wake-up call” of banks during the crisis.
Number of Pages in PDF File: 33
Keywords: Bank loans, boom and bust, crisis, event study, Europe
JEL Classification: G14, G20working papers series
Date posted: February 25, 2012
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