This paper explores how bank characteristics and the institutional environment influence the composition of banks’ loan portfolios. Using a new data set based on the recent EBRD Banking Environment and Performance Survey (BEPS), which was conducted in 2005 for 220 banks in 20 transition countries, we show that bank characteristics such as ownership and size are important determinants of bank cu...

We exploit the 2004 Indian Ocean Tsunami as a natural experiment to investigate how aggregate bank lending changes in response to a large and unexpected shock. Using a dataset comprising aggregate bank loans at provincial level, we assess the impact of the Indian Ocean Tsunami of 2004 on aggregate provincial lending in Thailand. The results of a Difference-in-Differences investigation suggest t...

Theory predicts that information sharing among lenders attenuates adverse selection and moral hazard, and can therefore increase lending and reduce default rates. To test these predictions, we construct a new international data set on private credit bureaus and public credit registers. We find that bank lending is higher and proxies for default rates are lower in countries where lenders share i...

While bank lending may fall in response to shocks to their liquidity, to what extent are such shocks transmitted to borrowing …rms? Tracing such transmission mechanisms has proven di¢ cult in the past due to a lack of micro data linking banks to borrowing …rms and identi…cation concerns. This paper uses di¤erential liquidity shocks arising from unanticipated nuclear tests in Pakistan in 1998, a...

Recent research on multi-loan lending operations has remained largely silent on the question of what ties together the retail banking functions of scale and scope lending. Our main point is that in a sense, they are just two different manifestations of banking expansion. This is especially true to the extent that banks are heavily involved in consolidation-based lending. In a multi-loan call pr...

Bank lending is an important investment activity in an economy. It is widely held that banks are well informed about their borrowers, and banks use such information in their lending decisions to preserve the qualities of their loan portfolios. In this study, we propose a model of the interplay between banks and financial analysts who follow their stocks, and characterize equilibrium with a view...

Recent studies have found that banks with low capital ratios have significantly decreased their lending to the real estate sector. This correlation between real estate lending and bank capital could be the result of voluntary decisions by banks to-recapitalize, or it could be the result of direct actions taken by bank regulators. We find that banks with low capital ratios reduce their real esta...