Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212062
Authors: 
Goderis, Benedikt
Marsh, Ian W.
Castello, Judit Vall
Wagner, Wolf
Year of Publication: 
2007
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 4/2007
Abstract: 
One of the most important recent innovations in financial markets has been the development of credit derivative products that allow banks to more actively manage their credit portfolios than ever before.We analyse the effect that access to these markets has had on the lending behaviour of a sample of banks, using a sample of banks that have not accessed these markets as a control group.We find that banks that adopt advanced credit risk management techniques (proxied by the issuance of at least one collateralized loan obligation) experience a permanent increase in their target loan levels of around 50%.Partial adjustment to this target, however, means that the impact on actual loan levels is spread over several years.Our findings confirm the general efficiency-enhancing implications of new risk management techniques in a world with frictions suggested in the theoretical literature.
Subjects: 
credit derivatives
bank loans
moral hazard
JEL: 
G20
G21
G28
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-352-0
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.