International Economics

<< N°164

  N°164  
Issue Q4 2020  
Better the devil you know: Home and sectoral biases in bank lending  
A. Burietz
L. Ureche-Rangau
 
This paper empirically investigates banks’ lending and the extent to which they are influenced by specific preferences in terms of geographical location and industry. We study whether banks develop a field of expertise and focus on it, or whether they prefer to grant loans quite evenly among countries and industries. We manually built an original database of syndicated loans for banks in the four major banking systems in the eurozone, to estimate the determinants of loans’ amounts between 2005 and 2013. Our findings highlight a domestic bias and a sectoral bias with banks lending larger amounts to their domestic borrowers and to industries they are more familiar with.
Abstract

   
Credit supply ; Biases ; Syndicated loan market ; Keywords
F34 ; G01 ; G21 ; JEL classification
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