Bank Capital, Borrower Power, and Loan Rates

• 成果类型: Article
• 署名作者: Santos, Joao A. C.; Winton, Andrew
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; Universidade Nova de Lisboa; University of Minnesota System; University of Minnesota Twin Cities; Shanghai Jiao Tong University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz001
• 发表日期: 2019
• 页码: 4501
• 关键词: Information rents; RISK-MANAGEMENT

摘要

We examine how bank capital and borrower bargaining power affect loan spreads. Consistent with previous studies, higher bank capital has a negative impact on loan rates, but borrower cash flow has a significant effect on this impact: compared with high-capital banks, low-capital banks charge more for borrowers with low cash flow, but offer greater marginal discounts as these borrowers' cash flow rises. These effects are largely focused on more bank-dependent borrowers. We find some evidence that low-capital banks charge a higher premium for bank-dependent borrowers' systematic risk, but not for their total equity risk or default risk.