Title: Large Bank Shareholders and Terms of Bank Loans During the Global Financial Crisis
Abstract:This paper analyses the influence of large bank shareholders on the terms of bank loans for a sample of 12,045 loans to 3,290 borrowers from 45 countries over the period 2004-2013. We investigate the ...This paper analyses the influence of large bank shareholders on the terms of bank loans for a sample of 12,045 loans to 3,290 borrowers from 45 countries over the period 2004-2013. We investigate the effects of bank control over the bank loans terms during the crisis, whether the bank shareholder is a lender or not. The results suggest that, in line with a monitoring effect, firms with bank shareholders that are non-lenders have borrowed at lower interest rates during the period of crisis. However, borrowers have paid higher spreads when they have borrowed from banks that are also shareholders. This effect is consistent with banks obtaining private benefits as large shareholders as a consequence of the informational hold up problems affecting borrowers.Read More
Publication Year: 2020
Publication Date: 2020-01-08
Language: en
Type: article
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