Are Bank Loans Still 'Special' (Especially During a Crisis)? Empirical Evidence from a European Country

33 Pages Posted: 9 Oct 2012

See all articles by Christophe J. Godlewski

Christophe J. Godlewski

University of Strasbourg - Faculty of Law and Business; EM Strasbourg Business School; LaRGE Research Center

Date Written: November 1, 2011

Abstract

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.

Keywords: bank loans, boom and bust, crisis, event study, Europe

JEL Classification: G14, G20

Suggested Citation

Godlewski, Christophe J., Are Bank Loans Still 'Special' (Especially During a Crisis)? Empirical Evidence from a European Country (November 1, 2011). 29th International Conference of the French Finance Association (AFFI) 2012. Available at SSRN: https://ssrn.com/abstract=2083635 or http://dx.doi.org/10.2139/ssrn.2083635

Christophe J. Godlewski (Contact Author)

University of Strasbourg - Faculty of Law and Business ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

EM Strasbourg Business School ( email )

61 Avenue de la Forêt Noire
Strasbourg, 67000
France

HOME PAGE: http://www.em-strasbourg.eu/

LaRGE Research Center ( email )

1 place d'Athènes
Strasbourg, 67000
France

HOME PAGE: http://droit.unistra.fr/

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