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Bank funding, securitization, and loan terms: evidence from foreign currency lending


Ongena, Steven; Brown, Martin; Kirschenmann, Karolin (2014). Bank funding, securitization, and loan terms: evidence from foreign currency lending. Journal of Money, Credit and Banking, 46(7):1501-1534.

Abstract

We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique data set that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization.

Abstract

We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique data set that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:G21; G32; F34; foreign currency debt; bank funding; securitization
Language:English
Date:23 October 2014
Deposited On:18 Jan 2016 12:35
Last Modified:24 Sep 2016 00:00
Publisher:Wiley-Blackwell Publishing, Inc.
ISSN:0022-2879
Additional Information:This is the peer reviewed version of the following article: BROWN, M., KIRSCHENMANN, K. and ONGENA, S. (2014), Bank Funding, Securitization, and Loan Terms: Evidence from Foreign Currency Lending. Journal of Money, Credit and Banking, 46: 1501–1534. doi: 10.1111/jmcb.12147, which has been published in final form at http://doi.org/10.1111/jmcb.12147. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving (http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms).
Publisher DOI:https://doi.org/10.1111/jmcb.12147
Other Identification Number:merlin-id:12112

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