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Non-bank lenders in the syndicated loan market

Author

Listed:
  • Iñaki Aldasoro
  • Sebastian Doerr
  • Haonan Zhou

Abstract

Non-bank lenders are an important source of syndicated credit to non-financial corporates in most regions and industries. Their loan origination, however, is more concentrated by location and sector than that of banks and it is also more volatile. Syndicated loans arranged by non-banks carry a significantly higher spread relative to those by banks, consistent with the pattern that firms borrowing from non-banks are more leveraged and less profitable, ie riskier. Non-banks generally grant a smaller share of their new loans to foreign borrowers than banks do. During domestic financial crises, they reduce this share further, exacerbating the global transmission of shocks.

Suggested Citation

  • Iñaki Aldasoro & Sebastian Doerr & Haonan Zhou, 2022. "Non-bank lenders in the syndicated loan market," BIS Quarterly Review, Bank for International Settlements, March.
    • Handle: RePEc:bis:bisqtr:2206c
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    References listed on IDEAS

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    Cited by:

    1. Iñaki Aldasoro, 2022. "Comment on "Growing importance of investment funds in capital flows" by Richard Schmidt and Pinar Yesin," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 72(01), pages 41-44, December.
    2. Gaffney, Edward & Hennessy, Christina & McCann, Feargal, 2022. "Non-bank mortgage lending in Ireland: recent developments and macroprudential considerations," Financial Stability Notes 3/FS/22, Central Bank of Ireland.
    3. Elliott, David & Meisenzahl, Ralf R. & Peydró, José-Luis, 2024. "Nonbank lenders as global shock absorbers: Evidence from US monetary policy spillovers," Journal of International Economics, Elsevier, vol. 149(C).
    4. Amiraslani, Hami & Donovan, John & Phillips, Matthew A. & Wittenberg-Moerman, Regina, 2023. "Contracting in the Dark: The rise of public-side lenders in the syndicated loan market," Journal of Accounting and Economics, Elsevier, vol. 76(1).
    5. Iñaki Aldasoro & Sebastian Doerr & Haonan Zhou, 2023. "Non-bank lending during crises," BIS Working Papers 1074, Bank for International Settlements.

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    More about this item

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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