We study the difference between loan sales and credit default swaps. A bank lends money to an entrepreneur to undertake a positive NPV project. After the loan has been made, the bank finds out if the project benefits from monitoring and if it should sell the loan to release regulatory capital. A bank can lay off credit risk by either selling the loan or by buying credit insurance through a cred...

The publication of the ‘Fed Boston Study’ drew considerable attention to the long-standing issue of discrimination of minorities in mortgage lending. Federal regulators have since stepped up their efforts to enforce greater compliance of banks with various fair-lending laws. Stengel & Glennon (1999), in their influential paper, offered the industry a statistical methodology that individual bank...

Given current concerns on foreign currency exposures in emerging economies, we examine the currency denomination of bank loans. We compare the currency requested by borrowers and the currency decision subsequently made by a bank in Bulgaria prior to the current crisis. We analyze more than hundred thousand loans to sixty thousand different firms granted during the period 2003-2007. We relate th...