Lending relationships in loan renegotiation: Evidence from corporate loans

Arbeitspapier

This paper presents evidence that personal relationships between corporate borrowers and bank loan officers improve the outcomes of loan renegotiation. Analysing a bank reorganization in Greece in the mid-2010s, I find that firms that experience an exogenous interruption in their loan officer relationship confront three consequences: one, the firms are less likely to renegotiate their loans; two, conditional on renegotiation, the firms are given tougher loan terms; and three, the firms are more likely to alter their capital structure. These results point to the importance of lending relationships in mitigating the cost of distress for borrowers in loan renegotiations.

Angaben zum Objekt

• ISBN: 978-92-899-4553-0
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ECB Working Paper ; No. 2553

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Transactional Relationships; Contracts and Reputation; Networks ; Financial Markets and the Macroeconomy ; Central Banks and Their Policies ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Thema: loan renegotiation ; bank branch closures ; loan officers ; corporate credit

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Plessen-Mátyás, Katharina
• Ereignis: Veröffentlichung
• (wer): European Central Bank (ECB)
• (wo): Frankfurt a. M.
• (wann): 2021

Weitere Informationen

• DOI: doi:10.2866/70808
• Handle: http://hdl.handle.net/10419/237692
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ