Work

Are Banks Still Special When There Is a Secondary Market for Loans?

Year: 2012

Type: article

Abstract: ABSTRACT Secondary market trading in loans elicits a significant positive stock price response by a borrowing firm's equity investors. We find the major reason for this response is the alleviation of borrowing firms’ financial constraints. We also find that new loan announcements are associated with a positive stock price effect even when prior loans made to the same borrower already trade on the secondary market. We conclude that the special role of banks has changed due to their ability to create an active secondary loan market while simultaneously maintaining their traditional role as information producers.

Source: The Journal of Finance

DOI: 10.1111/j.1540-6261.2012.01769.x

Authors: AMAR GANDE, ANTHONY SAUNDERS

Institutions: Southern Methodist University, Rutgers, The State University of New Jersey, University of Miami, Vanderbilt University, New York University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2145151948

FWCI: 48.3

Cites: 34

Cited by: 176

Related to: 10