SoleCRISTransition linkFrontpageTransition linkInstructionsTransition linkLogin Bank of Finland

A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
This is the view page of publication. On this page you can view basic information of publication or go back on previous page using back-action on the bottom of the page. If you want to move to edit the information of publication, use the actions on the bottom of the page or continue using the system from menu.


Senior debt and market discipline: Evidence from bank-to-bank loans, Journal of Banking and Finance January (2019). Francis, Bill; Hasan, Iftekhar; Liu, LiuLing; Wang, Haizhi


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Francis, Bill; Hasan, Iftekhar; Liu, LiuLing; Wang, Haizhi 
Number of authors
Status Published
Year of publication 2019 
Date 15.01.2019 
Name of article Senior debt and market discipline: Evidence from bank-to-bank loans 
Name of journal Journal of Banking and Finance
Volume of issue 98 
Number of issue January 
Pages 170-182 
Abstract We empirically investigate whether taking senior bank loans would enhance market discipline and control risk-taking among borrowing banks. Controlling for endogeneity concern arising from borrowing bank self-select into taking senior bank debt, we document that both the spreads and covenants in loan contracts are sensitive to bank risk variables. Our analysis also reveals that borrowing banks reduce their risk exposure after their first issuance of senior bank debt. We also find that lending banks significantly increase their collaboration with borrowing banks and increase their presence in the home markets of borrowing banks.
Free text descriptor in Finnish pankit; luotot; riskit 
Free text descriptor in English bank senior debt, bank-to-bank loans, market discipline, private monitoring 
JEL-codes G21; G28; F34; F65 
ISSN / e-ISSN 0378-4266 
auki Internet addresses
Additional information Available online 5 November 2018.