We examine how banks perceive and price related party transactions (RPTs) into the cost of debt for borrowers affiliated with a business group. For this, we use a unique dataset that brings together information on RPTs, ownership structure, and syndicated loans of Asian firms. Our results show...

We examine how related party transactions (RPTs) affect the syndicated loan structure of borrowing firms affiliated with a business group, differentiating between detrimental and beneficial RPTs. We find that borrowers with more detrimental RPTs have less concentrated syndicates, while those...

We empirically examine whether bank lending corruption is influenced by the ownership structure of banks, a country's regulatory environment and its level of economic development. We find that corruption in lending is higher when state-owned banks or family-owned banks provide a higher...

We compare the different existing approaches to the construction of time-varying Z-score measures, plus an additional alternative one, using a panel of banks for the G20 group of countries covering the period 1992-2009.We examine which ways of estimating the moments used in these different...

Frictions prevent banks to immediately adjust their capital ratio towards their desired and/or imposed level. This paper analyzes (i) whether or not these frictions are larger for regulatory capital ratios vis-à-vis a plain leverage ratio; (ii) which adjustment channels banks use to adjust...

We aim to assess how accurately accounting and stock market indicators predict rating changes for Asian banks. We conduct a stepwise process to determine the optimal set of early indicators by tracing upgrades and downgrades from rating agencies, as well as other relevant factors. Our results...

Potential new entrants to the European Union from Central and Eastern European countries face many challenges to achieve financial convergence with the existing EU nations. Using detailed case studies from Bulgaria, the Czech Republic, Latvia, Lithuania and Poland and analysis of cross country...

This paper deals with the link between market interest rates and bank profitability for EU countries in the context of convergence towards a single currency and standardization of prudential regulation. A model of bank income and cost adjustment to changes in market interest conditions (level of...

This paper investigates whether market information is reliable to predict financial deterioration of large Too Big To Fail banks in Asia. A stepwise logit model is first estimated to isolate the optimal set of accounting indicators to predict rating downgrades. The model is then extended to...