We provide a competing theory of why financial intermediaries securitize their assets. We build a dynamic general equilibrium model of bank competition in which banks face a trade-off between the lending rate and the number of potential projects. Competing for projects, banks decrease their...

This paper investigates how banks’ loan pricing responds to the environmental performance of borrowing companies. Using a unique hand-collected dataset of bank loans in China, we find that banks reward borrowers that have higher environmental responsibility scores with lower loan interest...