Credit risk, owner liability, and bank loan maturities during the global financial crisis

• Type: Article in International Scientific Journal
• Date: 2020

Authors

Duarte, FD (Author) Other; Matias Gama, APM (Author) Other; Gulamhussen, MA (Author) Other

Journal

Title: European Financial Management

Vol. 26

Pages: 628-683

ISSN: 1354-7798

Publisher: Wiley-Blackwell

Indexing

ISI Web of Knowledge - 3 Citations

Scopus - 7 Citations

Other information

Authenticus ID: P-00R-5JJ

DOI: 10.1111/eufm.12239

Abstract (EN): We relate credit risk and owners' personal guarantees to bank loan maturities during the global financial crisis. The findings, which remain robust to reverse causality, show that firms rated as low risk, with a strong relationship with the bank, whose owners provided personal guarantees and with large loan sizes obtained longer maturities. Banks with larger nonperforming loans provided loans with shorter maturities. Firms with low- and high-risk ratings that provided owners' personal guarantees obtained longer maturities. These findings shed additional light on the relationship between risk and loan maturities and the role of personal guarantees in reducing information asymmetries.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 56