Who Lends Before Banking Crises? Evidence from the International Syndicated Loan Market

Systemic Risk Centre Seminar

Date: Monday, 15th March 2021
Time: 1.00-2.00pm GMT
Speaker: Mariassunta Giannetti (SSE)
Seminar Title: Who Lends Before Banking Crises? Evidence from the International Syndicated Loan Market

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.