Bank lending – what has changed post crisis?

Abstract

Using syndicated loan data, the paper finds that loan spreads have increased and have remained elevated post-2009. Regressions, controlling for currency fixed effects, loan types, loan sizes, number of participating banks, tenors, confirm the higher spreads post-2009. Further analysis reveals that the average number of banks per syndication rose for developed economies but fell for emerging economies. This is explained by the higher market shares of non-Japanese Asian banks in developing economies post-crisis, but with lower syndication intensity. Consistent with the capital shock hypothesis, Western and Japanese banks intensify the degree of syndication post-crisis, but other Asian banks do not. The lower syndication intensity of suggests that market efficiency has declined for developing economies. Syndication should be further encouraged to reduce spreads.