Banking environment and loan syndicate structure: a cross-country analysis

Godlewski, Christophe J.

doi:10.1080/09603100903459899

Cited by 10 publications

(3 citation statements)

References 33 publications

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“…Although these studies examine the syndicate loan structure through moral hazards in monitoring, they do not identify a specific source of moral hazard between borrowing firms and lending banks that will affect the monitoring needs of lead arrangers in a syndicate. In addition, there are studies that investigate the loan syndication structure in international syndicated loan markets on banking environment characteristics (Godlewski, ), legal protection (Bae and Goyal, ), arranger certification and reputation (Godlewski et al., ; Meuleman et al., ; Gatti et al., ) and institutional and legal differences (Qian and Strahan, ).…”

Section: Introductionmentioning

confidence: 99%

CEO Risk‐taking Incentives and Bank Loan Syndicate Structure

Chen

2014

Business Fin & Account

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This paper investigates the effects of a borrowing firm's CEO risk‐taking incentives on the structure of the firm's syndicated loans. When CEO risk‐taking incentives are high, syndicates are structured to facilitate better due diligence and monitoring efforts. These syndicates have a smaller number of total lenders and are more concentrated, and lead arrangers will retain a greater portion of the loan. Moreover, CEO risk‐taking incentives have a lesser effect on the syndicate structure when lead arrangers have a good reputation and a prior lending relationship with a borrowing firm, while they have a greater effect on the syndicate structure when borrowing firms have low information transparency, are financially distressed or have low growth prospects.

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Section: Introductionmentioning

confidence: 99%

CEO Risk‐taking Incentives and Bank Loan Syndicate Structure

Chen

2014

Business Fin & Account

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“…2 2 Other characteristics such as syndicate size and concentration also have an influence on agency costs (see Esty and Megginson, 2003; Lee and Mullineaux, 2004; Jones et al, 2005; François and Missonnier‐Piera, 2007; Sufi, 2007; and Godlewski, 2010). …”

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confidence: 99%

Bank Lending Networks, Experience, Reputation, and Borrowing Costs: Empirical Evidence from the French Syndicated Lending Market

Godlewski¹,

Sanditov²,

Burger‐Helmchen

2012

Business Fin & Account

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We investigate the network structure of bank lending markets and evaluate the impact of lenders' network centrality, considered a measure of their experience and reputation, on borrowing costs. We show that the French market for syndicated bank loans is a 'small world' characterized by large local density and short social distances between lenders. Such a network structure allows for better information and resources flows between banks thus enhancing their social captial. We then show that lenders' experience and reputation play a significant role in reducing loan spreads and thus increasing borrower's wealth.

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“…The syndicate structure also weakens the arranger's incentives to screen and monitor borrowers because it holds only a portion of the loan, generating moral hazard problems. Other characteristics such as syndicate size and concentration also have an influence on agency costs (Esty and Megginson, ; Lee and Mullineaux, ; Jones, Lang, and Nigro, ; François and Missonnier‐Piera, ; Sufi, ; Focarelli et al., ; Godlewski, ; Bosch and Steffen, ).…”

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confidence: 99%

Financial Institutions Network and the Certification Value of Bank Loans

Godlewski¹,

Sanditov

2017

Financial Management

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Social networks play an important role in mitigating informational frictions related to financial intermediation, especially bank lending. We investigate the effect of the network of financial institutions on the certification value of bank loans using data on syndicated loans to European companies. We find that the presence of more central leaders in a syndicate substantially increases the stock market's reaction to loan announcements. This certification value is reinforced when informational frictions are more important but vanishes when there are severe disruptions in the functioning of financial markets, such as during the financial crisis of 2008.

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Banking environment and loan syndicate structure: a cross-country analysis

Cited by 10 publications

References 33 publications

CEO Risk‐taking Incentives and Bank Loan Syndicate Structure

CEO Risk‐taking Incentives and Bank Loan Syndicate Structure

Bank Lending Networks, Experience, Reputation, and Borrowing Costs: Empirical Evidence from the French Syndicated Lending Market

Financial Institutions Network and the Certification Value of Bank Loans

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