Bank regulations and loan contracts

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Show simple item record Magalhaes, Rômulo Tribo Gine, José Antonio 2012-05-16T13:35:43Z 2012-05-16T13:35:43Z 2011-10-15
dc.identifier.bibliographicCitation SSRN working papers series, oct. 15, 2011
dc.description.abstract This study examines empirically how bank regulations adopted in lender countries influence the characteristics of loan contracts, using a sample of 46,453 loans made by 278 large commercial banks around 39 countries, to borrowers in 83 countries, in the period from 1998 to 2006. Our findings indicate that the stringency of capital regulations have an inverse U-shaped relationship with priced risk characteristics (spread and maturity) of loan contracts. In addition, more powerful official supervision is associated with riskier loan contracts. Both official supervisory power and private monitoring work as substitutes to capital regulation to reduce the (priced) risk measures of loan contracts when capital stringency is low. For higher capital stringency, supervision and private monitoring complement capital regulation in reducing loan contracts risk measures. Finally, we found that a country’s degrees of legal enforcement and bank industry competition complement capital and private monitoring regulations to improve risk characteristics of loan contracts. The evidence highlights the importance of how bank lending practices are affected by bank regulations and their interactions with themselves and other institutional country factors.
dc.description.sponsorship The authors wish to thank the financial support of the Ministerio de Ciencia y Tecnologia from Spain (grant # SEJ2006-09401).
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher SSRN
dc.relation.ispartofseries SSRN working papers series
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.subject.other Banks
dc.subject.other Regulation
dc.subject.other Credit
dc.subject.other Risk
dc.subject.other Bank lending
dc.subject.other Syndicated loans
dc.title Bank regulations and loan contracts
dc.type workingPaper
dc.subject.eciencia Empresa
dc.identifier.doi 10.2139/ssrn.1343845
dc.rights.accessRights openAccess
dc.type.version submittedVersion
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