I study the role of deposit accounts in bank-firm lending relationships, using a dataset with detailed information about all Norwegian firms’ bank deposit and loan account balances. I show that firms are more likely to increase borrowing from a bank where they hold deposit accounts, and less likely to end the lending relationship. In regressions with both firm and bank fixed effects, I find tha...

One of the most important risks faced by a bank is that of loan default by its borrowers. Existing literature has documented the negative announcement-period returns for lending banks when a big sovereign borrower announces a moratorium on its bank loans. In contrast, little research has been undertaken that analyzes bank shareholder wealth effects when a major corporate borrower declares defau...

Introduction Residential mortgage loans are the major instrument of housing finance. A mortgage arrangement is equivalent to an exchange of a loan today for a stream of future payments. In general, a household or investor will borrow whenever the marginal cost of borrowing is less than the marginal utility or benefit derived from the asset. Mortgage loans are secured by the real property, and p...

This paper reviewed and analyzed the development of our nation’s loan loss provision system, then studied the relations of commercial bank loan loss provision and earnings management and capital management through empirical study. This paper selected 14 domestic commercial banks of year 2001-2009 as data sample, using Kanagaretnam et al.’s (2003) research method, dividing the loan loss provisio...

I exploit the introduction of syndicated bank loan ratings by Moody’s and Standard & Poor’s in 1995 to examine (a) which firms value certification by a third-party ratings agency, and (b) the effects of certification on financial and real outcomes of borrowers. I find evidence that larger and younger borrowers are more likely to obtain bank loan ratings, but only if they do not have a credit ra...

R epo contracts are a kind of collateralized loan that has become predominant in the United States among large cash investors. There are several types of repo contracts, such as bilateral delivery-versuspayment repos, interdealer repos, and tri-party repos. A significant portion of repo transactions in the United States take the form of tri-party repos, where a third party (a clearing bank) pro...