Publications

Research Summary

Islamic Financing Practices

By: Samuel L. Hayes

Samuel L. Hayes III is examining (with faculty of Harvard University's Law School and Center for Middle Eastern Studies) Islamic banking and investment practices. Because the Koran prohibits the payment of fixed interest and guarantees on funds invested either with... View Details

July 2009 (Revised January 2012)
Case

Risk Management at Wellfleet Bank: All That Glitters Is Not Gold

By: Anette Mikes

This case motivates a debate on the role of staff functions, such as risk management: what does it mean for them to be independent, and at the same time, to partner the business lines? The case describes the risk assessment process in the corporate banking arm of... View Details

Keywords: Decision Choices and Conditions; Judgments; Credit; Banks and Banking; Governance Controls; Risk Management; Mathematical Methods

March 2020 (Revised February 2023)
Case

Performance Management at Afreximbank (A)

By: Robert S. Kaplan, Siko Sikochi and Josh Steimle

Based in Cairo, Afreximbank was founded in October 1993 as a specialized continental financial institution designed to address the low level of intra-African trade, the decline in financial flows to Africa, the worsening external debt situation of many African... View Details

Keywords: Performance Management; Balanced Scorecard; Performance Expectations; Performance Evaluation; Performance Improvement; Organizational Culture; Strategy; Banking Industry; Africa; Egypt

2020
Working Paper

The Effects of Information on Credit Market Competition: Evidence from Credit Cards

By: C. Fritz Foley, Agustin Hurtado, Andres Liberman and Alberto Sepulveda

We show empirically that public credit information increases competition in credit markets. We access data that cover all credit card borrowers in Chile and include details about relationship borrowers have with each lender. We exploit a natural experiment whereby a... View Details

Keywords: Consumer Credit; Financial Intermediaries; Credit; Information; Competition; Credit Cards; Financial Institutions

SSRN

24 Sep 2024
Research & Ideas

Why Small Businesses Deserve More Credit

study with Deniz Aydin, an assistant professor at Washington University in St. Louis’s Olin Business School. Test case in Turkey To test how small firms manage and use their debt, Aydin and Kim turned to extensive lending data from a... View Details

Keywords: by Rachel Layne; Banking; Banking

October 2012
Article

Securitization without Adverse Selection: The Case of CLOs

By: Effi Benmelech, Jennifer Dlugosz and Victoria Ivashina

In this paper, we investigate whether securitization was associated with risky lending in the corporate loan market by examining the performance of individual loans held by CLOs. We employ two different datasets that identify loan holdings for a large set of CLOs and... View Details

Keywords: Personal Finance; Performance; Markets; Banks and Banking; Debt Securities; Investment Portfolio; Financing and Loans

March 2006 (Revised December 2013)
Case

Hexcel Turnaround — 2001 (A)

By: Paul W. Marshall, James Quinn and Reed Martin

Hexcel's new CEO is faced with deciding how to "take out" $60 million in cash costs in fiscal 2002, as two of the company's end markets—electronics and commercial aerospace—are expected to decline precipitously. Options include closing plants, exiting a business, or... View Details

Keywords: Private Equity; Negotiation; Management Teams; Organizational Change and Adaptation; Strategy; Change Management; Crisis Management; Borrowing and Debt; Aerospace Industry; Electronics Industry; United States

October 2013 (Revised November 2013)
Case

Blackstone and the Sale of Citigroup's Loan Portfolio

By: Victoria Ivashina and David Scharfstein

The credit boom that preceded the 2007-2009 financial crisis led to several lending practices that exposed banks to large risks. In particular, when the financial crisis unraveled, there were several billion dollars' worth of leveraged buyout (LBO) loans that were... View Details

Keywords: Restructuring; Private Equity; Insolvency and Bankruptcy; Credit Derivatives and Swaps; Financial Markets; Investment; Banking Industry; Banking Industry

December 2002 (Revised January 2004)
Case

Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (A)

By: Benjamin C. Esty and Aldo Sesia

In June 1999, the Basel Committee on Banking Supervision announced plans to revise the capital standards for banks. The Basel Committee believed that project loans were significantly riskier than corporate loans and, therefore, warranted higher capital charges under... View Details

Keywords: Risk and Uncertainty; Project Finance; Financing and Loans; Projects; Standards; Banks and Banking; Banking Industry

25 Oct 2020
Research & Ideas

The Dark Side of Fintech Borrowing

fintech lenders harvest deeper insight into those borrowers that banks typically reject after running a standard credit check. Fintech lenders claim to consult additional metrics like utility bills or rent payments to identify... View Details

Keywords: by Rachel Layne; Banking; Banking

14 Aug 2014
Working Paper Summaries

The State of Small Business Lending: Credit Access During the Recovery and How Technology May Change the Game

Keywords: by Karen Mills & Brayden McCarthy; Banking; Banking

Research Summary

Credit Supply Shocks, Network Effects, and the Real Economy

By: Laura Alfaro

We consider the real effects of bank lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all firms in Spain with a matched bank-firm-loan dataset with information on the universe of corporate loans for... View Details

2022
Chapter

Lessons Learned from Support to Business during COVID-19

By: Gabriel Chodorow-Reich, Benjamin Iverson and Adi Sunderam

The authors survey the new federal subsidies and loans provided to businesses in the first year of the pandemic—including the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, and aid targeted at specific industries such as airlines... View Details

Keywords: COVID-19 Pandemic; Small Business; Government Legislation; Policy

2021
Chapter

Business Continuity Insurance in the Next Disaster

By: Samuel Gregory Hanson, Adi Sunderam and Eric Zwick

This article draws lessons from the business support policies pursued in the COVID-19 pandemic to guide policy design for the next disaster. We contrast the performance of the Paycheck Protection Program to the Main Street Lending Program to illustrate how design... View Details

Keywords: COVID-19 Pandemic; Policy; Economic Slowdown and Stagnation; Financing and Loans; United States

2010
Working Paper

Regulating for Legitimacy: Consumer Credit Access in France and America

By: J. Gunnar Trumbull

Theories of legitimate regulation have emphasized the role of governments either in fixing market failures to promote greater efficiency or in restricting the efficient functioning of markets in order to pursue public welfare goals. In either case, features of markets... View Details

Keywords: Borrowing and Debt; Credit; Financial Markets; Personal Finance; Governing Rules, Regulations, and Reforms; Business History; Business and Government Relations; Welfare; France; United States

2010
Other Unpublished Work

Why Takeover Vulnerability Matters to Debtholders

By: Joan Farre-Mensa

Recent work documents that firms that are more vulnerable to takeover have higher borrowing costs. This paper investigates the reasons behind this stylized fact. My results show that firms with few antitakeover defenses face a higher cost of debt because lenders are... View Details

Keywords: Acquisition; Borrowing and Debt; Cost; Equity; Banks and Banking; Investment Portfolio; Risk Management; Agreements and Arrangements; Business and Shareholder Relations; Conflict and Resolution

SSRN

June 2023
Article

Why Is Dollar Debt Cheaper? Evidence from Peru

By: Bryan Gutiérrez, Victoria Ivashina and Juliana Salomao

In emerging markets, a significant share of corporate loans are denominated in dollars. Using novel data that enables us to see currency and the cost of credit, in addition to several other transaction-level characteristics, we re-examine the reasons behind dollar... View Details

Keywords: Emerging Market Corporate Debt; Currency Mismatch; Liability Dollarization; Carry Trade; Currency; Emerging Markets; Borrowing and Debt; Interest Rates; Peru

SSRN

July 2003 (Revised September 2003)
Case

Refinancing of Shanghai General Motors (A), The

By: Mihir A. Desai and Mark Veblen

The CFO of General Motors' joint venture in Shanghai, Shanghai General Motors (SGM), wants to refinance almost $900 million of project finance it raised to begin operations. The highest priority is improving the terms of the financing with regard to costs and specific... View Details

Keywords: Business Subsidiaries; Multinational Firms and Management; Joint Ventures; Financing and Loans; Auto Industry; Shanghai