Bank lending characteristics and the impact of the recent global financial crisis
The objective is to study the evolution of the credit supply and its determinants after the collapse of Lehman Brothers. In this paper, we built an original handmade database of syndicated loans granted by banks located in four European countries, i.e. France, Germany, Italy and Spain, to jointly estimate the spread and the amount of each loan. Our conclusions highlight a signi cant impact of the subprime crisis on bank lending behaviour, and even more precisely, a flight-to-home eff ect for banks located in France and Germany. In addition, the results show a signi cant sectoral bias for banks located in Germany while banks located in France highlight a preference for portfolio diversi cation, granting loans with better terms to companies that belong to industries they are not used to lending to. Finally, we find that banks with strong balance sheets are more able to support the credit supply following the subprime crisis promoting the implementation of banking regulations such as Basel III.
Keywords: Credit supply, fi nancial crisis, home bias, syndicated loan market