'Brexit' and the Contraction of Syndicated Lending

54 Pages Posted: 23 Nov 2016 Last revised: 20 Jun 2019

See all articles by Tobias Berg

Tobias Berg

Frankfurt School of Finance & Management

Anthony Saunders

New York University - Leonard N. Stern School of Business

Larissa Schäfer

Frankfurt School of Finance & Management

Sascha Steffen

Frankfurt School of Finance & Management

Date Written: May 20, 2019

Abstract

We document a 23% decline in loan issuances in the UK syndicated loan market after the Brexit vote relative to a set of comparable loan markets both globally and in the EU and using a matched sample based on pre-Brexit loan issuances. The decline in lending is mostly driven by a reduction of UK firm borrowing, but we do not find evidence that the UK loses its attractiveness as a financial center for cross-border borrowing. We also do not find differential effects along any cross-sectional dimension (firm characteristics, additional demand for corporate bonds, loan market segments or types). The drop in lending thus seems pervasive among UK firms.

Keywords: Brexit, Syndicated Loans, Competition, Financial Centers

JEL Classification: G15, G20

Suggested Citation

Berg, Tobias and Saunders, Anthony and Schäfer, Larissa and Steffen, Sascha, 'Brexit' and the Contraction of Syndicated Lending (May 20, 2019). Available at SSRN: https://ssrn.com/abstract=2874724 or http://dx.doi.org/10.2139/ssrn.2874724

Tobias Berg

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Anthony Saunders

New York University - Leonard N. Stern School of Business ( email )

44 West 4th Street
9-190, MEC
New York, NY 10012-1126
United States
212-998-0711 (Phone)
212-995-4220 (Fax)

Larissa Schäfer (Contact Author)

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Sascha Steffen

Frankfurt School of Finance & Management ( email )

Adickesallee
32-34
Frankfurt, 60322
Germany
16097326929 (Phone)

HOME PAGE: http://www.sascha-steffen.de

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