%0 Journal Article
%T Relationship between BanksĄŻ Capital and Credit Risk-Taking through Syndicated Loan
%A Shu Ling Lin
%A Wei Peng Chen
%A Jun Lu
%J Modern Economy
%P 1297-1308
%@ 2152-7261
%D 2015
%I Scientific Research Publishing
%R 10.4236/me.2015.612123
%X This paper aims to investigate whether banks exploit their information
advantage over bank-dependent borrowers, analyzing the impact of capital level
on banking credit risk-taking under syndication loans. By using a unique data
composed of 4828 syndicated loan of publicity banks facilities from the U.S.
for the period 1987-2010, we propose theoretical issues of the impact and effectiveness
of banksĄŻ credit risk-taking from the perspectives of borrowersĄŻ bank
dependent. The results show that there is positive correlation between the ratios
of bankĄŻs capital over its total assets and banksĄŻ credit risk-taking. It
implies that banks with lower capital level charge higher lending spread for
borrowers with fewer cash flows; hence the banks would bear a lower probability
of default.
%K Capital Regulation
%K Syndication Loans
%K Credit Risk-Taking
%K Nonperforming Loan (NPL)
%K Probability of Default
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=62356