Caporale, Guglielmo Maria Lodh, Suman Nandy, Monomita
Year of Publication:
CESifo Working Paper No. 5353
This paper examines the impact of the recent global financial crisis on the cost of debt capital (syndicated loans) in a leading emerging market, namely China, using difference-in-differences and GARCH approaches. Before the crisis China adopted banking reforms allowing entry of foreign banks and more domestic participation in the syndicated loan market. As a result, during the crisis the volume of syndicated loans grew steadily, in contrast to other countries. In addition, the amount of foreign syndicated loans decreased and average maturity increased compared to the pre-crisis period. Our findings provide useful information to policy makers to devise effective responses to financial crises.
loan spread loan amount loan maturity China financial crisis