IDEAS home Printed from https://ideas.repec.org/a/cup/jfinqa/v56y2021i8p2800-2842_7.html
   My bibliography  Save this article

Creditor Rights and Bank Loan Losses

Author

Listed:
  • Heitz, Amanda Rae
  • Narayanamoorthy, Ganapathi

Abstract

We develop hypotheses regarding the association between two types of creditor rights and bank loan losses. Contrary to prior research conclusions, bank lending risk is negatively associated with both restrictions on reorganization and the secured creditor being paid first. Using accounting disclosures, we develop novel empirical measures of the probability of default (PD) and loss given default (LGD) at the loan-portfolio level. Different types of creditor rights have differential effects pertaining to PD and LGD and exhibit significant intertemporal variation. We corroborate our cross-country findings using the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) shock to creditor rights.

Suggested Citation

  • Heitz, Amanda Rae & Narayanamoorthy, Ganapathi, 2021. "Creditor Rights and Bank Loan Losses," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(8), pages 2800-2842, December.
    • Handle: RePEc:cup:jfinqa:v:56:y:2021:i:8:p:2800-2842_7
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022109020000678/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Allen N. Berger & Cristina Ortega & Matias Ossandon Busch & Raluca Roman, 2024. "Banking on Deforestation: The Cost of Nonenforcement," Working Papers 24-21, Federal Reserve Bank of Philadelphia.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jfinqa:v:56:y:2021:i:8:p:2800-2842_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jfq .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.