On-site inspecting zombie lending

Detalhes bibliográficos
Autor(a) principal: Bonfim, Diana
Data de Publicação: 2020
Outros Autores: Cerqueiro, Geraldo, Degryse, Hans, Ongena, Steven R. G.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.14/38269
Resumo: In spite of growing regulatory pressure in most developed economies, “zombie lending” remains a widespread practice by banks. In this paper we exploit a series of large-scale on-site inspections made on the credit portfolios of several Portuguese banks to investigate how these inspections affect banks’ future lending decisions. We find that an inspected bank becomes 20% less likely to refinance zombie firms, immediately spurring their default. Overall, banks seemingly reduce zombie lending because the incentives to hold these loans disappear once they are forced to recognize losses.
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spelling On-site inspecting zombie lendingZombie lendingBank supervisionIn spite of growing regulatory pressure in most developed economies, “zombie lending” remains a widespread practice by banks. In this paper we exploit a series of large-scale on-site inspections made on the credit portfolios of several Portuguese banks to investigate how these inspections affect banks’ future lending decisions. We find that an inspected bank becomes 20% less likely to refinance zombie firms, immediately spurring their default. Overall, banks seemingly reduce zombie lending because the incentives to hold these loans disappear once they are forced to recognize losses.Veritati - Repositório Institucional da Universidade Católica PortuguesaBonfim, DianaCerqueiro, GeraldoDegryse, HansOngena, Steven R. G.2022-07-19T09:03:28Z2020-02-272020-02-27T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/38269eng10.2139/ssrn.3530574info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-09-06T12:38:18Zoai:repositorio.ucp.pt:10400.14/38269Portal AgregadorONGhttps://www.rcaap.pt/oai/openairemluisa.alvim@gmail.comopendoar:71602024-09-06T12:38:18Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv On-site inspecting zombie lending
title On-site inspecting zombie lending
spellingShingle On-site inspecting zombie lending
Bonfim, Diana
Zombie lending
Bank supervision
title_short On-site inspecting zombie lending
title_full On-site inspecting zombie lending
title_fullStr On-site inspecting zombie lending
title_full_unstemmed On-site inspecting zombie lending
title_sort On-site inspecting zombie lending
author Bonfim, Diana
author_facet Bonfim, Diana
Cerqueiro, Geraldo
Degryse, Hans
Ongena, Steven R. G.
author_role author
author2 Cerqueiro, Geraldo
Degryse, Hans
Ongena, Steven R. G.
author2_role author
author
author
dc.contributor.none.fl_str_mv Veritati - Repositório Institucional da Universidade Católica Portuguesa
dc.contributor.author.fl_str_mv Bonfim, Diana
Cerqueiro, Geraldo
Degryse, Hans
Ongena, Steven R. G.
dc.subject.por.fl_str_mv Zombie lending
Bank supervision
topic Zombie lending
Bank supervision
description In spite of growing regulatory pressure in most developed economies, “zombie lending” remains a widespread practice by banks. In this paper we exploit a series of large-scale on-site inspections made on the credit portfolios of several Portuguese banks to investigate how these inspections affect banks’ future lending decisions. We find that an inspected bank becomes 20% less likely to refinance zombie firms, immediately spurring their default. Overall, banks seemingly reduce zombie lending because the incentives to hold these loans disappear once they are forced to recognize losses.
publishDate 2020
dc.date.none.fl_str_mv 2020-02-27
2020-02-27T00:00:00Z
2022-07-19T09:03:28Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.14/38269
url http://hdl.handle.net/10400.14/38269
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 10.2139/ssrn.3530574
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv mluisa.alvim@gmail.com
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