This paper examines the information content of loan announcements using an event study methodology. I differentiate between loan announcements according to the type of lending institution. The empirical results suggest that the information released by bank loans announcements are greater than loans announced by other lenders. Furthermore, the market response is greatest when the borrower firm h...

We investigate the foreclosure policy of collateral-based loans in which the endogenous collateral value plays a crucial role. If creditors are able to commit, then the equilibrium arrangement is more likely to feature forebearance lending by specifying a lower level of liquidation (or roll over all of the loans) relative to the expost efficiency criterion for each realization of the interim si...

The profitability of banks depends upon a number of factors including existing business conditions, bank size, efficiency of operations, leverage (volume of deposits to equity capital), and the extent of competition among banks. Overall bank profitability and some determinants of profitability can be measured by using a number of operating ratios as rate of return on capital, rate of return on ...

This paper seeks to investigate the determinants of banking network profitability in Iran from 2007 to 2012. The results of our study indicate that both bank-specific factors and macroeconomic factors influence banks’ profitability in Iran. Results confirm that bank profitability is significantly influenced by investment to total assets ratio, non-performing loans to total assets ratio, a...

The paper briefly described the operational mechanism innovation of key Microfinance Service Providers (MSPs) in Bangladesh. Grameen Bank has chosen to examine the approaches of microfinance. Grameen Bank is dominating microfinance market in Bangladesh in outreach, outstanding loans, savings, and efficient selected delivery mechanism. They offer micro-credit, savings and social services to the ...

Abstract: At the macro level, the time-series of the amounts of loans granted (a flow) and repaid (a flow) to the banking system in each period are not available. The information on these flows is important in many analyses, such as the impact of the bank lending on investment outlays. However, one can get the information concerning the structure of loans (a stock variable) regarding their dura...

Although the escalation literature has grown steadily over the past 20 years, there has been very little research bridging the gap between laboratory experiments and qualitative field studies on escalation. What has been missing are quantitative tests of escalation hypotheses in their natural context. This study helps fill such a gap by testing the responsibility hypothesis within the banking i...

By using the sources of investment and based on provincial data, this paper examines the efficiency performance of the four sources of total investment in fixed assets in China for the period 1985–1998: state budget appropriation, national bank loans, self-raised funds, and foreign investment. The result of the panel data study shows that the growth of provincial output is positively related to...

How can the worsening of a small part of the loan market lead to a crash as well as a prolonged depression in secondary loan prices, bank equity prices, and lending activity? This paper seeks to answer this question. We present a model in which banks issue long-term loans and finance them with repurchase agreements (“repos”) from short-term lenders in order to leverage up their equity. Banks di...

Credit derivatives are the latest in a series of innovations that have had a significant impact on credit markets. Using a micro data set of individual corporate loans, this paper explores whether use of credit derivatives is associated with an increase in bank credit supply. We find evidence that greater use of credit derivatives is associated with greater supply of bank credit for large term ...