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Regulator supervisory power and bank loan contracting

He, Zhongda; Qiao, Guannan; Zhang, Le; Zhang, Wenrui


Using a sample from 38 economies, we examine the relation between bank regulators’ supervisory power and loan spreads. We find that loans issued by banks in economies with more powerful supervisors have higher spreads. The positive association is more pronounced when firms have lower credit quality, when the relationships between firms and banks are less established, when syndicate loans involve fewer lenders, and when lead banks have a riskier profile. Further analyses reveal that loans issued by...[Show more]

CollectionsANU Research Publications
Date published: 2021
Type: Journal article
Source: Journal of Banking and Finance
DOI: 10.1016/j.jbankfin.2021.106062


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