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Bank Funding, Securitization, and Loan Terms: Evidence from Foreign Currency Lending

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  • MARTIN BROWN
  • KAROLIN KIRSCHENMANN
  • STEVEN ONGENA

Abstract

We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique data set that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization.

Suggested Citation

  • Martin Brown & Karolin Kirschenmann & Steven Ongena, 2014. "Bank Funding, Securitization, and Loan Terms: Evidence from Foreign Currency Lending," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(7), pages 1501-1534, October.
    • Handle: RePEc:wly:jmoncb:v:46:y:2014:i:7:p:1501-1534
    DOI: 10.1111/jmcb.12147
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