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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Interbank market integration, loan rates, and firm leverage |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Banking and Finance |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0378-4266 |
| Volume | 35 |
| Number | 3 |
| Page Range | 544 - 559 |
| Date | 2011 |
| Abstract Text | This paper investigates the effect of interbank market integration on small firm finance in the build-up to the 2007–2008 financial crisis. We use a comprehensive data set that contains contract terms on individual loans to 6047 firms across 14 European countries between 1998:01 and 2005:12. We account for the selection that arises in the loan request and approval process. Our findings imply that integration of interbank markets resulted in less stringent borrowing constraints and in substantially lower loan rates. The decrease was strongest in markets with competitive banking sectors. We also find that in the most rapidly integrating markets, firms became substantially overleveraged during the build-up to the crisis. |
| Free access at | Official URL |
| Official URL | http://www.sciencedirect.com/science/article/pii/S0378426610003122 |
| Digital Object Identifier | 10.1016/j.jbankfin.2010.08.011 |
| Other Identification Number | merlin-id:11776 |
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