Bank Funding, Securitization and Loan Terms: Evidence from Foreign Currency Lending
CentER Discussion Paper Series No. 2009-78
55 Pages Posted: 7 Oct 2009 Last revised: 29 May 2013
Date Written: April 17, 2013
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.
Keywords: foreign currency debt, banking
JEL Classification: G21, G3, F34, F37
Suggested Citation: Suggested Citation