Syndicated Lending, Competition, and Relative Performance Evaluation

• 成果类型: Article
• 署名作者: Schneider, Thomas; Strahan, Philip E.; Yang, Jun
• 署名单位: University of Oklahoma System; University of Oklahoma - Norman; Boston College; National Bureau of Economic Research; University of Notre Dame
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhae052
• 发表日期: 2024
• 页码: 3802
• 关键词: LIQUIDITY RISK; banks; COMPENSATION; luck; pay

摘要

Relative performance evaluation (RPE) intensifies competitive pressure by tying executive compensation to the profits of rivals. We show that these contracts make loan syndication harder by reducing banks' willingness to participate in loans underwritten by banks named in their RPE contracts. Lead arranger banks, which are more frequently named in RPE, hold larger shares of the loans they syndicate, and their borrowers receive smaller and fewer loans and face higher spreads. Our results highlight the tension between the normal benefits of competition versus the need for cooperation in loan syndication.