TY  - BOOK
AU  - Chen,Jiaqian
AU  - Vera,Giuseppe
TI  - Bank Balance Sheets and the Value of Lending
T2  - IMF Working Papers
SN  - 9781475599183
SN  - 1018-5941
AV  - HG1641 
U1  - 332.7 23
PY  - 2017///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Loans
KW  - Financial statements
KW  - fast
KW  - BUSINESS & ECONOMICS / Finance
KW  - bisacsh
KW  - Electronic books
N1  - Cover; Contents; I: Introduction; II: Literature Review; III: Loan Announcements and Bank Balance Sheets; IV: Borrower Performance; V: Discussion and Conclusions; Appendix; A Data Description; B Model; List of Tables; 1 The Effect of Loan Announcements on Borrower Equity Returns; 2 The Effect of Lender Characteristics on Borrower Equity Returns (1); 3 The Effect of Lender Characteristics on Borrower Equity Returns (2); 4 The Effect of Lender Characteristics on Borrower Equity Returns (3); 5 The Loan Announcement Effect and Borrower Performance; A1 Summary Statistics for Syndicated Loan Deals; List of FiguresB1 Bank Lending, Profit, and Monitoring Intensity -- Baseline; B2 Bank Lending, Profit, and Monitoring Intensity -- Sensitivity Analysis
N2  - We study 1,400 UK syndicated loans, together with the financial history of the lead bank and the borrowing firm. We interpret abnormal equity returns around loan announcements as the value of the lending relationship to the firm. We find that: (i) Consistent with previous evidence, the value of lending is higher when the firm is riskier or more opaque, suggesting that it primarily reflects the lead bank's screening and monitoring activities. (ii) As a bank becomes larger, more profitable or more capitalized, the value of its loans first increases and then decreases. The largest, most capitalised or most profitable banks do not give the most valuable loans. (iii) Firms which receive low-value loans are more likely to experience low profitability and financial distress during the lending relationship. By relating the state of bank balance sheets to borrower performance, we offer a new angle to evaluate the impact of financial conditions on the real economy
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ER  -