Determinants of Syndicated Lending in European Banks and the Impact of the Financial Crisis

Barry Howcroft, Alper Kara, David Marques-Ibanez

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Syndicated lending is a widely practiced alternative to traditional bilateral lending and within Europe the syndicated loan market increased significantly during the 2000s. Using a dataset consisting of 4166 European banks, the authors examine the factors that determine the bank's willingness to use syndicated lending rather than traditional lending during the period 2000–2010. The paper finds that syndicated lending was an alternative to bilateral loans when banks were targeting growth or looking to utilize potential capital surpluses. Syndicated lending was also used to improve the returns and credit quality of the bank's loan portfolios. However, in the post crisis period, European banks are less interested in syndicated loan markets and larger banks, especially, those with strong capital bases, are refraining from syndicated lending.
Original languageEnglish
Pages (from-to)473-490
Number of pages18
JournalJournal of International Financial Markets, Institutions and Money
Volume32
Early online date21 Jul 2014
DOIs
Publication statusPublished - Sep 2014
Externally publishedYes

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Financial crisis
Lending
European banks
Bank loans
Syndicated loans
Bilateral
Willingness
Factors
Targeting
Surplus
Credit
Loan portfolio

Cite this

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abstract = "Syndicated lending is a widely practiced alternative to traditional bilateral lending and within Europe the syndicated loan market increased significantly during the 2000s. Using a dataset consisting of 4166 European banks, the authors examine the factors that determine the bank's willingness to use syndicated lending rather than traditional lending during the period 2000–2010. The paper finds that syndicated lending was an alternative to bilateral loans when banks were targeting growth or looking to utilize potential capital surpluses. Syndicated lending was also used to improve the returns and credit quality of the bank's loan portfolios. However, in the post crisis period, European banks are less interested in syndicated loan markets and larger banks, especially, those with strong capital bases, are refraining from syndicated lending.",
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Determinants of Syndicated Lending in European Banks and the Impact of the Financial Crisis. / Howcroft, Barry; Kara, Alper; Marques-Ibanez, David.

In: Journal of International Financial Markets, Institutions and Money, Vol. 32, 09.2014, p. 473-490.

Research output: Contribution to journalArticle

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