Bank loans and borrower value during the recent financial crisis Empirical evidence from France
نویسنده
چکیده
We investigate the impact of bank loan announcements on borrower value during the recent boom and bust cycle of the 2000’s using a sample of 253 large loans to French borrowers. We find no significant stock market reaction to bank loan announcements during the boom period but a significant and negative one during the financial crisis. Hence, although we document significant changes in bank behavior during the crisis with conservative contractual and organizational modifications, we cannot provide empirical support for the certification value of bank loans during a period of increased informational asymmetries. However, bank loan announcements for larger firms receiving large loans funded by international pools of lenders contribute to borrower value even during the crisis.
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