Multilateral Loans and Interest Rates: Further Evidence on the Seniority Conundrum

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Multilateral Loans and Interest Rates: Further Evidence on the Seniority Conundrum Abstract During Europe's sovereign-debt crisis, interest rate spreads have been highly correlated with the share of multilateral loans that were considered senior to private markets. As both variables are potentially endogenous, we follow two different approaches to analyze the direction of causality. First, we use a set of IV regressions where the differences between sovereign ratings serve as instruments. Second, we analyze a new panel-survey dataset on seniority and interest rate expectations. In both approaches, we find evidence for the seniority conundrum -i.e., a positive impact of multilateral loans on interest rate spreads. JEL-Codes: F340, G120, H810. Terms of use: Documents in EconStor may

Interbank Offered Rate Based on Artificial Intelligence Algorithm

“…Benchmark interest rate refers to the interest rate with general reference significance in the money market. Pricing or rate of return of other financial products in the financial market can be determined based on this benchmark interest rate, and monetary authorities can also make and implement monetary policies based on this interest rate [4,5]. Interbank offered rate, also known as inter-bank offered rate, is the rate at which commercial banks finance funds in the money market.…”