Loan commitments, investment decisions and the signalling equilibrium
Article Abstract:
The use of bank loan commitments has increased by 80% in the 90s. Loan commitments are a more effective way of financing new, risky investment projects compared to spot loans, as they result in overestimation allowing the cost to be totally carried by the firm in a competitive capital market. Loan commitments are a form of forward contracting which allow a vital sorting mechanism which spot loans cannot offer. The study analyses the implications of the use of loan commitments.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
Fixed-rate deposit insurance and risk-shifting behavior at commercial banks
Article Abstract:
The existence of the FDIC fixed-rate deposit insurance scheme does not encourage widespread risk-shifting among US commercial banks. A test on a sample of US banks shows a negative relationship between asset and leverage risks of commercial banks despite the deposit insurance scheme. Thus, banks apparently do not attempt to shift their risks to the FDIC. Fears that risk-shifting increases after deregulation are also debunked in this study.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
The Effects of Political, Economic and Institutional Development on International Banks
Article Abstract:
International banks currently face economic and financial problems which must be faced. Short-term liquidity problems are more prevalent than solvency problems. Full governmental assistance must be more available.
Publication Name: Journal of Banking & Finance
Subject: Business
ISSN: 0378-4266
Year: 1983
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Special allocations, investment decisions, and transaction costs in partnerships. A note on 'economically optimal performance evaluation and control systems': the optimality of two-tailed investigations
- Abstracts: The impact of trading commission incentives on analysts' stock coverage decisions and earnings forecast. The information content of earnings, revenues, and expenses
- Abstracts: The international debt crisis and the Craxi Report. The ongoing weakening of the international financial system
- Abstracts: Concern over lump sums for loan grant payments. Commission needed to resolve local finance conundrum. Councils get stop-gap aid as MPs urge flexible help
- Abstracts: Keeping the brakes on costs. Rentals, residuals and running costs. Driving for the best deal