Lending Booms, Reserves, and the Sustainability of Short-Term Debt: Inferences from the Pricing of Syndicated Bank Loans
AbstractThis paper analyzes the determinants of spreads on syndicated bank lending to emerging markets, treating the loan-extension and pricing decisions as jointly determined. Compared to the bond market, our findings highlight the role of international banks in providing credit to smaller borrowers about whom information is least complete and, more generally, support the interpretation of bank finance as dominating that segment of international financial markets characterized by the most pronounced information asymmetries. Domestic lending booms and low reserves in relation to short-term debt have been priced in the expected manner by international banks. The high level of short-term debt in East Asia was supported by high growth rates but was characterized by a knife-edge quality.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7113.
Date of creation: May 1999
Date of revision:
Publication status: published as Eichengreen, Barry and Ashoka Mody. "Lending Booms, Reserves And The Sustainability Of Short-Term Debt: Inferences From The Pricing Of Syndicated Bank Loans," Journal of Development Economics, 2000, v63(1,Oct), 5-44.
Note: IFM ME
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- Eichengreen, Barry & Mody, Ashoka, 2000. "Lending booms, reserves and the sustainability of short-term debt: inferences from the pricing of syndicated bank loans," Journal of Development Economics, Elsevier, Elsevier, vol. 63(1), pages 5-44, October.
- Eichengreen, Barry & Mody, Ashoka, 1999. "Lending booms, reserves, and the sustainability of short-term debt - inferences from the pricing of syndicated bank loans," Policy Research Working Paper Series 2155, The World Bank.
- F3 - International Economics - - International Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-17 (All new papers)
- NEP-MON-1999-05-17 (Monetary Economics)
- NEP-PKE-1999-05-17 (Post Keynesian Economics)
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