The behaviour of interest rate spreads prior to and after the financial crisis: evidence across OECD countries.

This study investigates the impact of the 2008 global financial crisis on interest rate spreads across OECD countries, using a number of panel methodological approaches, over the 1990–2015 period. We examine the differential impact of the global financial crisis on interest rate spreads by dividing the sample period into two, i.e. the period prior to and after the crisis. Having identified and estimated the impact of a number of drivers on interest rate spreads, the findings document that after the 2008 financial crisis, the sensitivity of spreads to its determinants turn out to be statistically significant and incorporate credit risk to a greater extent. The findings survive a number of robustness checks. The policy implications of the empirical findings are also discussed.N/

Is the Corporate Loan Market Globally Integrated? A Pricing Puzzle

We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the United States, other things equal. Differences in borrower, loan, and lender characteristics do not appear to explain this phenomenon. Borrowers overwhelmingly issue in their natural home market and bank portfolios display home bias. This may explain why pricing discrepancies are not competed away, though their causes remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identified, home bias appears to be material for pricing, and corporate financing costs differ across Europe and the United States. Copyright 2007 by The American Finance Association.

Why Have Bank Interest Margins Been so High in Indonesia Since the 1997/1998 Financial Crisis?

We investigate the determinants of net interest margins of Indonesian banks after the 1997/1998 financial crisis. Using data for 93 Indonesian banks over the 2001-2009 period, we estimate an econometric model using a pooled regression as well as static and dynamic panel regressions. Our results confirm that the structure of loan portfolios matters in the determination of interest margins. Operating costs, market power, risk aversion and liquidity risk have positive impacts on interest margins, while credit risk and cost to income ratio are negatively associated with margins. Our results also corroborate the loss leader hypothesis on cross-subsidization between traditional interest activities and non-interest activities. State- owned banks set higher interest margins than other banks, while margins are lower for large banks and for foreign banks

The corporate choice between public debt, bank loans, traditional private debt placements, and 144A debt issues

Public debt, Private debt, Bank loans, 144A debt, Capital structure, G32, G21,

State-Owned Banks: Acquirers in M&A Deals

Between 2003 and 2013, according to Zephyr (BvD) data, 22% of M&A deals between banks have involved state-owned banks, either as targets (12%) or as acquirers (10%). The behavior of state-owned banks in the market control is, however, under-researched. The standard Inefficient Management Hypothesis suggests that more efficient managerial teams target less performing firms. The IMH, however, has never been tested for deals involving state-owned banks, nor the pre-deal operating characteristics of state-owned banks involved as acquirers in M&A deals. We build up a unique dataset of 3,682 deals between banks that allows us to classify M&As into four categories, depending on the ownership of the acquirer and the target: 1) public re-organization (deals between two state-owned banks), 2) publicization (a state-owned bank acquiring a private bank) 3) privatization and 4) private re-organization (deals between two private banks). Our findings confirms for the first time the IMH also for state-owned banks. We also find that state- owned banks active as acquirers in the market for corporate control have a better pre-deal performance compared to the private benchmark; this evidence is stronger for development banks