Bank Funding, Securitization and Loan Terms: Evidence from Foreign Currency Lending

European Banking Center Discussion Paper No. 2009-21

CentER Discussion Paper Series No. 2009-78

55 Pages Posted: 7 Oct 2009 Last revised: 29 May 2013

See all articles by Martin Brown

Martin Brown

University of St. Gallen

Karolin Kirschenmann

Centre for European Economic Research (ZEW)

Steven Ongena

University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: April 17, 2013

Abstract

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

Brown, Martin and Kirschenmann, Karolin and Ongena, Steven R. G., Bank Funding, Securitization and Loan Terms: Evidence from Foreign Currency Lending (April 17, 2013). European Banking Center Discussion Paper No. 2009-21. Available at SSRN: https://ssrn.com/abstract=1483008 or http://dx.doi.org/10.2139/ssrn.1483008

Martin Brown (Contact Author)

University of St. Gallen ( email )

Unterer Graben 21
St. Gallen, CH-9000
Switzerland

Karolin Kirschenmann

Centre for European Economic Research (ZEW) ( email )

Germany
+496211235351 (Phone)

Steven R. G. Ongena

University of Zurich - Department of Banking and Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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