AGENT BANK BEHAVIOR IN BANK LOAN SYNDICATIONS

Authors


  • The Office of Thrift Supervision and the Federal Reserve Bank of Philadelphia, as a matter of policy, disclaim any responsibility for any publication or statements by any of their employees. The views expressed herein are those of the authors and do not necessarily reflect the views of these agencies, or of the authors' colleagues on the staffs of the two agencies. The authors wish to thank the editor, William T. Moore, and the referee, Donald Mullineaux, for many helpful comments that improved the article. In addition, Bob DeYoung, David Nebhut, Gary Whalen, and participants at the 2001 Chicago Bank Structure Conference also provided helpful comments.

Abstract

Using Shared National Credit (SNC) Program data from 1995 to 2000, we extend previous empirical work on bank loan syndications. First, we examine recent trends in the volume and examiner-based credit quality of loans syndicated through the banking system. Second, we estimate a panel regression model to explain changes in an agent bank's retained share of a syndicated loan in terms of information asymmetries, loan credit quality, capital constraints, and loan age and maturity. We find that these variables are significant determinants of the proportion of a SNC loan retained by an agent bank for its portfolio over time.

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