Moral hazard and adverse selection in the originate-to-distribute model of bank credit

• 成果类型: Article
• 署名作者: Berndt, Antje; Gupta, Anurag
• 署名单位: Carnegie Mellon University; University System of Ohio; Case Western Reserve University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2009.04.002
• 发表日期: 2009
• 页码: 725-743
• 关键词: Syndicated loans; Secondary loan market; Originate-to-distribute; moral hazard; adverse selection

摘要

Bank credit has evolved from the traditional relationship banking model to an originate-to-distribute model. We show that the borrowers whose loans are sold in the secondary market underperform their peers by about 9% per year (risk-adjusted) over the three-year period following the initial sale of their loans. Therefore, either banks are originating and selling loans of lower quality borrowers based on unobservable private information (adverse selection), and/or loan sales lead to diminished bank monitoring that affects borrowers negatively (moral hazard). We propose regulatory restrictions on loan sales, increased disclosure, and a loan trading exchange/clearinghouse as mechanisms to alleviate these problems. (C) 2009 Elsevier B.V. All rights reserved.