Download This PaperWho Lends Before Banking Crises? Evidence from the International Syndicated Loan Market
45 Pages Posted: 17 Dec 2020
Date Written: November 29, 2020
Abstract
We show that foreign lenders and low market share lenders extend more credit in comparison to other lenders during lending booms leading to banking crises, but not during other credit expansions. Less established lenders also increase the amount of credit they extend to riskier borrowers without asking for collateral or imposing covenants and higher interest rates. Our results suggest that taking lenders’ characteristics into account could provide a useful barometer for macroprudential policies.
Keywords: Foreign banks, crises, credit booms
JEL Classification: G21, F3
Suggested Citation: Suggested Citation
Giannetti, Mariassunta and Jang, Yeejin, Who Lends Before Banking Crises? Evidence from the International Syndicated Loan Market (November 29, 2020). Available at SSRN: https://ssrn.com/abstract=3739393 or http://dx.doi.org/10.2139/ssrn.3739393
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