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  • May 2010
  • Article
  • American Economic Review: Papers and Proceedings

Loan Syndication and Credit Cycles

By: Victoria Ivashina and David Scharfstein
  • Format:Print
  • | Pages:8
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Abstract

Cyclicality in the supply of business credit has been the focus of a considerable amount of research. This cyclicality can stem from shocks to borrowers' collateral, which affect firms' ability to raise capital if agency and information problems are significant (Ben S. Bernanke and Mark Gertler, 1989). Or it can stem from shocks to bank capital, which affects the supply of bank loans if agency and information problems limit the ability of banks to raise additional capital (Bernanke, 1983). In this paper, we examine cyclicality in the supply of credit in the context of modern forms of banking, often referred to as the "originate-to-distribute" model. In particular, we focus on the role of syndicated lending.

Keywords

Business Cycles; Capital; Credit; Banks and Banking; Financing and Loans; System Shocks; Financial Services Industry

Citation

Ivashina, Victoria, and David Scharfstein. "Loan Syndication and Credit Cycles." American Economic Review: Papers and Proceedings 100, no. 2 (May 2010): 57–61.
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About The Authors

Victoria Ivashina

Finance
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David S. Scharfstein

Finance
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  • Why Is Dollar Debt Cheaper? Evidence from Peru By: Bryan Gutiérrez, Victoria Ivashina and Juliana Salomao
  • Applications or Approvals: What Drives Racial Disparities in the Paycheck Protection Program? By: Sergey Chernenko, Nathan Kaplan, Asani Sarkar and David S. Scharfstein
  • Disruption and Credit Markets By: Bo Becker and Victoria Ivashina
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