The effect of banks' financial reporting on syndicated-loan structures

• 成果类型: Article
• 署名作者: Beatty, Anne; Liao, Scott; Zhang, Haiwen (Helen)
• 署名单位: University System of Ohio; Ohio State University; University of Toronto; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.01.002
• 发表日期: 2019
• 关键词: information; conservatism; reputation; covenants

摘要

We explore how an accounting measure of information asymmetry between lead and participating lenders influences syndication structures by examining whether lead lenders' commercial and industrial (CM) loan-loss provision validity affects the fraction of loans they retain. We first conduct multiple tests showing that C&I provision validity reflects banks' underlying screening and monitoring effectiveness. We then find lead lenders' loan share decreases with C&I provision validity, but not with non-C&I provision validity. Consistent with an information effect, we further find this association is attenuated by (i) alternative information sources about the borrowers and (ii) previous lead/participant relationships and participant/borrower relationships. (C) 2019 Elsevier B.V. All rights reserved.