11 Pages Posted: 20 Jan 2010
Date Written: January 18, 2010
Cyclicality in the supply of business credit has been the focus of a considerable amount of research. This cyclicality can stem from shocks to borrowers’ collateral, which affect firms’ ability to raise capital if agency and information problems are significant (Ben S. Bernanke and Mark Gertler, 1989). Or it can stem from shocks to bank capital, which affects the supply of bank loans if agency and information problems limit the ability of banks to raise additional capital (Bernanke, 1983). In this paper, we examine cyclicality in the supply of credit in the context of modern forms of banking, often referred to as the “originate-to-distribute” model. In particular, we focus on the role of syndicated lending.
Keywords: Banks, Credit, Syndicated loans
JEL Classification: E4, E5, G2
Suggested Citation: Suggested Citation
Ivashina, Victoria and Scharfstein, David S., Loan Syndication and Credit Cycles (January 18, 2010). American Economic Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1538892
By Jeremy Stein