Bank loans vs. trade credit

Counter-cyclical substitution between trade credit and bank credit

This paper explores the substitution relationship between trade credit and bank credit, and its countercyclic dynamic pattern through economic cycles. We propose a new theoretical model, using a mechanism design method, which predicts the substitution between the two credits and its counter-cyclic behavior, subject to the condition of technological efficiency not less than one. This model also ...

Trade Credit versus Bank Credit during Financial Crises

A Credit Cycle Model of Bank Loans and Corporate Bonds: A Bank Capital View

This paper investigates macroeconomic effects of bank regulation in a continuoustime macro-finance framework with both bond-financing and bank-financing. Risky firms appreciate bank credit because banks are efficient at liquidating assets for troubled firms. However, risky firms must pay the risk premium for banks’ exposure to aggregate risks. Our framework captures the feature that the cost of...

Concentration in corporate bank loans

The aim of this paper is to empirically investigate the determinants of creditor concentration in the use of bank loans by firms in a European cross-country framework. We analyze the influence of loan and borrower characteristics but also banking market structure and legal enforcement variables that are expected to influence the financial and strategic decisions relative to bank lending concent...

Credit Risk Analysis and Prediction Modelling of Bank Loans Using R

Nowadays there are many risks related to bank loans, especially for the banks so as to reduce their capital loss. The analysis of risks and assessment of default becomes crucial thereafter. Banks hold huge volumes of customer behaviour related data from which they are unable to arrive at a judgement if an applicant can be defaulter or not. Data Mining is a promising area of data analysis which ...