To ask or not to ask? Bank capital requirements and loan collateralization

Degryse, Hans; Karapetyan, Artashes; Karmakar, Sudipto

doi:10.1016/j.jfineco.2021.05.017

Cited by 26 publications

(6 citation statements)

References 44 publications

(54 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…On a relative scale, loans not backed by collateral entail a higher risk weight; therefore, banks must allocate more capital for these loans (Degryse et al 2021). Thus, banks tend to price these loans higher to offset the risk and costs associated with these loans.…”

Section: Secured Lendingmentioning

confidence: 99%

Loan Portfolio Management and Bank Efficiency: A Comparative Analysis of Public, Old Private, and New Private Sector Banks in India

Venugopal

2024

Economies

View full text Add to dashboard Cite

This comparative study analyzed the impact of loan portfolio composition on the efficiency of different types of banks in India—public sector, old private, and new private banks—in, Fthe period between 2013 and 2022. Efficiency was evaluated using data envelopment analysis (DEA). The study considered four loan variables—term lending, working capital, priority sector lending, and secured lending in proportion to the overall loans—as independent factors against the efficiency score as the dependent variable, using a random-effects generalized least squares (GLS) regression framework. The results indicate that there were no significant effects on the efficiency of old private banks, except for working capital, which had a marginally negative impact on bank efficiency. Working capital, priority sector lending, and term lending have been found to significantly impact the efficiency of new private banks. Only term and working capital loans significantly affected the efficiency of public sector banks.

show abstract

Section: Secured Lendingmentioning

confidence: 99%

Loan Portfolio Management and Bank Efficiency: A Comparative Analysis of Public, Old Private, and New Private Sector Banks in India

Venugopal

2024

Economies

View full text Add to dashboard Cite

show abstract

“…Firms may also affect lenders' views by issuing bonds, which can be negotiated on the market, and lenders will use their market rating in evaluating credit requests. The variable Tangibility, measured by tangible assets scaled by total assets, is included as it is a critical driver due to the role of collaterals (Degryse et al, 2021;Tran, 2021). The level of a firm's innovation was measured through the firm's R&D output, which is proxied by the number of active patents (Innovation) (Katila, 2000), while the level of internationalisation was taken as the stock of the total foreign direct investments made by the parent company in foreign markets (Internationalisation) (Bannò & Trento, 2016;Kafouros et al, 2008).…”

Section: Control Variablesmentioning

confidence: 99%

Men are from Mars, women are from Venus: on lenders’ stereotypical views and the implications for a firm’s debt

et al. 2022

View full text Add to dashboard Cite

Building on social construction theory, this paper investigates how the presence of women on the board may affect access to credit because of lenders’ gender-stereotyped views. In our view this translates into different levels of the firm's bank debt. To evaluate the impact of gender as a social construct, we designed a within-country analysis in Italy by distinguishing between egalitarian and non-egalitarian contexts. To test our hypotheses, we used a sample of 3514 Italian listed and unlisted firms. Results showed a lower level of bank debt for firms with a relevant number of women in the boardroom (i.e., critical mass) if located in a non-egalitarian context. This effect was partially mitigated in firms during a crisis situation. While extant research explains gender-based differences in a firm’s financial structure by a change in inner-board mechanism/dynamics caused by differences in men/women characteristics, we argue that the social construction of gender may also induce lenders in different contexts to view boards with women differently in relation to access to credit.

show abstract

“…In each country, the EBA sorted banks in descending order of their market share by total assets, such that the exercise covered at least 50% of the national banking sector. The EBA capital exercise was unexpectedly announced soon after the stress tests conducted in July 2011 (Blattner et al., 2021; Degryse et al., 2021; Gropp et al., 2019; Mésonnier & Monks, 2015). Hence, the EBA capital exercise was plausibly unexpected and serves as a regulatory capital shock on bank credit supply to firms.…”

Section: Institutional Background and Hypothesesmentioning

confidence: 99%

“…2 2 This explains its appeal as an opportunity for analyzing domestic credit flows (Gropp et al., 2019) or banks' decisions to grant collateralized rather than uncollateralized loans (Degryse et al., 2021). …”

mentioning

confidence: 99%

International bank credit, nonbank lenders, and access to external financing

2022

View full text Add to dashboard Cite

Using a cross-country firm-bank dataset, we examine how an unexpected increase in bank capital requirements by the European Banking Authority affects firms' financial choices. We find that the regulatory shock implies a reduction in the supply of bank credit, with US firms affected the most. Yet, US firms can tap into the public bond markets and secure credit lines from nonbank financial institutions. This has implications for their capital structure and their real outcomes. These results suggest that diversified domestic loan markets, in which banks and nonbank financial institutions lend to corporations, can help overcome reductions in cross-border bank funding.

show abstract

To ask or not to ask? Bank capital requirements and loan collateralization

Cited by 26 publications

References 44 publications

Loan Portfolio Management and Bank Efficiency: A Comparative Analysis of Public, Old Private, and New Private Sector Banks in India

Loan Portfolio Management and Bank Efficiency: A Comparative Analysis of Public, Old Private, and New Private Sector Banks in India

Men are from Mars, women are from Venus: on lenders’ stereotypical views and the implications for a firm’s debt

International bank credit, nonbank lenders, and access to external financing

Contact Info

Product

Resources

About