Christopher James (UF Warrington)

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Christopher James

Finance

A seminar by Christopher James from the University of Florida

Title: Why Are Commercial Loan Rates So Sticky? The Effect of Private Information on Loan Spreads

Abstract: Past studies find that commercial loan spreads are “sticky,” in the sense that they do not fully respond to changes in market rates or observable firm credit risk characteristics. In this paper, we provide evidence that stickiness arises, in part, because the intensity of bank screening based on private soft information varies with changes in credit market conditions and observable firm credit risk characteristics. Our analysis demonstrates that stickiness in loan spreads does not necessarily indicate loan mispricing and may arise even in the absence of credit rationing, bank information monopolies, or behavioral biases in loan contracting.

Start date:

11am Friday, 19 Jul 2019

End date:

12.30pm Friday, 19 Jul 2019

Venue:

CBE LT2

Presenter(s):

Christopher James

Updated:   15 July 2019 / Responsible Officer:  CBE Communications and Outreach / Page Contact:  College Web Team