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Bank funding, securitization, and loan terms: Evidence from foreign currency lending

Journal Contribution - Journal Article

© 2014 The Ohio State University. We examine how bank funding structure and securitization activities affect the currency denomination of business loans. We analyze a unique data set that includes information on the requested and granted loan currency for 99,490 loans granted to 57,464 firms by a Bulgarian bank. Our findings document that foreign currency lending is at least partially driven by bank eagerness to match the currency structure of assets with that of liabilities. Our results also show that loan currency, as well as loan amount and maturity, are adjusted to make loans eligible for securitization.
Journal: Journal of Money, Credit and Banking
ISSN: 0022-2879
Issue: 7
Volume: 46
Pages: 1313 - 1554
Publication year:2014