Securitization and lending standards

Evidence from the European wholesale loan market

Alper Kara, David Marques-Ibanez, Steven Ongena

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

We assess the relative effect of securitization activity on banks’ lending rates employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that in the run-up to the 2007–2009 crisis banks more active at originating asset-backed securities did not price their loans more aggressively (i.e. with narrower lending spreads) than non-active banks. We show that also within the set of loans that were previously securitized, the relative level of securitization activity by the originating bank is not related to narrower lending spreads. Our findings, which are limited to the cross-sectional impact of securitization, suggest that the effect of securitization on the cost of corporate funding appears to be quite limited.
Original languageEnglish
Pages (from-to)107-127
Number of pages21
JournalJournal of Financial Stability
Volume26
Early online date25 Jul 2016
DOIs
Publication statusPublished - 1 Oct 2016
Externally publishedYes

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Securitization
Loans
Lending
Bank lending
Bank crises
Costs
Syndicated loans
Funding
Asset-backed securities

Cite this

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Securitization and lending standards : Evidence from the European wholesale loan market. / Kara, Alper; Marques-Ibanez, David; Ongena, Steven.

In: Journal of Financial Stability, Vol. 26, 01.10.2016, p. 107-127.

Research output: Contribution to journalArticle

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