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Securitization and lending standards: Evidence from the European wholesale loan market
journal contribution
posted on 2016-07-26, 12:57 authored by Alper Kara, David Marques-Ibanez, Steven OngenaWe assess the effect of securitization activity on banks’ lending rates employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that in the run-up to the 2007-2009 crisis banks more active at originating asset-backed securities did not price their loans more aggressively (i.e. with narrower lending spreads) than non-active banks. We show that also within the set of loans that were previously securitized, the relative level of securitization activity by the originating bank is not related to narrower lending spreads. Our findings, which are limited to the cross-sectional impact of securitization, suggest that the effect of securitization on the cost of corporate funding appears to be quite limited.
History
School
- Business and Economics
Department
- Business
Published in
Journal of Financial StabilityVolume
26Pages
107 - 127Citation
KARA, A., MARQUES-IBANEZ, D. and ONGENA, S., 2017. Securitization and lending standards: Evidence from the European wholesale loan market. Journal of Financial Stability, 26, pp. 107-127.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2016-07-12Publication date
2016-07-25Notes
This paper was accepted for publication in the journal Journal of Financial Stability and the definitive published version is available at http://dx.doi.org/10.1016/j.jfs.2016.07.004ISSN
1572-3089Publisher version
Language
- en