The paper studies the bank’s lending decision, based on three observed phenomena: Banks earn substantial profits from off-balance sheet activities and services, which they take into account in their lending decisions. Secondly, the critical point in the customer relation is the loan decision: the probability of the customer staying with the bank is a function of the loan extended each time one ...

Providing the best service in order to satisfy users is the main objective of any library. The loan policy is a major tool available to achieve this objective. Previous studies have all focused on the loan period, ignoring the loan policy’s other equally important aspect, which is the maximum number of books a user can borrow. Moreover, only book availability has been used as a measure of user ...

This paper studies loan collateral and relationship banking. A firm has different loans (e.g. short-term and long-term loans) and alternative collateral assets. How does it allocate the collateral assets between the loans? It optimally secures a long-term loan with collateral that incurs high information costs initially and has a strong learning effect during the loan period (e.g. accounts rece...

This paper studies the interconnectedness of banks in the syndicated loan market as a major source of systemic risk. We develop a set of novel measures to describe the "distance" (similarity) between two banks’syndicated loan portfolios and find that such distance explains how banks are interconnected in this market. As lead arrangers choose to work with those that have a similar focus in terms...

This study analyzes common stock return behavior around the announcement date of a bank loan commitment to a firm. The results demonstrate that loan commitments are viewed as positive when the more formal revolving credit agreement is used. Straight lines of credit do not show any significant reaction. Loan commitment announcements are associated with signals transmitted by banks and is an impl...

Lending officers (LOs) assess loan applications under conditions characterized by shifts in economic climate, wavering public credibility for banks and greater industry regulation. This paper examines the extent to which, in such an economic environment, the LOs’ assessment of commercial loan applications may be defensive, and, if so, which mechanisms that may trigger defensive loan assessment ...

Countrywide Loan Underwriting Expert System (CLUEZP) is an advanced, automated mortgage underwriting rule-based expert system. The system was developed to increase the production capacity and productivity of Countrywide branches, improve the consistency of underwriting, and reduce the cost of originating a loan. The system receives selected information from the loan application, credit report, ...

To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play...

In this paper, we analyze whether the total debt ratios and bank loan ratios of Chinese listed companies had any impact on their fixed investment in 2001-2006, and whether this impact, if it existed, differed among companies with differing investment opportunities. Our results are as follows. First, our analysis reveals that the total debt ratio (bank loan ratio) did have a negative impact on f...

We examine the implications of optimal credit risk transfer (CRT) for bank-loan monitoring, and the incentives for banks to engage in optimal CRT. In our model, properly designed CRT instruments allow banks to insure themselves against loan losses precisely in those states that signal monitoring. We find that optimal CRT enhances loan monitoring and expands financial intermediation, in contrast...