IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Are Banks Still Special? New Evidence on Their Role in the Corporate Capital-Raising Process

  • Christopher James
  • David C. Smith
Registered author(s):

    Bankers appear to play a special role in providing commitment-based financing to corporations. This type of lending is important not only for small firms that lack access to public debt markets but for large and medium-size companies as well. For such companies, commitment-based financing provides access to debt capital that becomes valuable when the firm has an immediate need for funding but interest rates in public debt markets are prohibitively high, or the firm is undervalued by the market. A good example of this was provided by the Asian crisis in the last quarter of 1998, when $10 billion of commercial paper was retired and $20 billion of net new commercial loans were booked. The authors also suggest that the fact that commitment-based financing is used by larger companies when they believe themselves to be undervalued in the market is probably the best explanation of why announcements of these types of loans elicit a positive stock price reaction. 2000 Morgan Stanley.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Morgan Stanley in its journal Journal of Applied Corporate Finance.

    Volume (Year): 13 (2000)
    Issue (Month): 1 ()
    Pages: 52-63

    in new window

    Handle: RePEc:bla:jacrfn:v:13:y:2000:i:1:p:52-63
    Contact details of provider: Web page:

    Order Information: Web:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bla:jacrfn:v:13:y:2000:i:1:p:52-63. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.