IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v65y1999i4p914-926.html
   My bibliography  Save this article

Loan Pushing and Triadic Relations

Author

Listed:
  • Ashwini Deshpande

Abstract

This paper is an attempt to define and explore the phenomenon of loan pushing in international lending in the 1970s. The earliest descriptions of loan pushing are anecdotal; this paper surveys the various facets that emerge from these anecdotes and suggests a possible definition that serves as the basis for a theoretical model. This model, inspired by the confessions of a banker, explores a triadic relationship between a corporation in the lender country, the lender bank, and a borrower in a developing country and suggests that a rational, profit maximizing commercial bank could end up pushing loans on to the borrower. Changes in international commercial banking in the 1970s that facilitated this type of loan pushing are discussed next. To the extent that the loan pushing doctrine is valid, it implies that the commercial banks were at least as responsible for the massive lending boom of the 1970s as the borrowers and should have been made to bear the cost of adjustment as well.

Suggested Citation

  • Ashwini Deshpande, 1999. "Loan Pushing and Triadic Relations," Southern Economic Journal, John Wiley & Sons, vol. 65(4), pages 914-926, April.
    • Handle: RePEc:wly:soecon:v:65:y:1999:i:4:p:914-926
    DOI: 10.1002/j.2325-8012.1999.tb00208.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/j.2325-8012.1999.tb00208.x
    Download Restriction: no
    File URL: https://libkey.io/10.1002/j.2325-8012.1999.tb00208.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arvind K Jain, 1986. "International Lending Patterns of U.S. Commercial Banks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 73-88, September.
    2. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    3. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-282, July.
    4. Calomiris, Charles W & Kahn, Charles M, 1991. "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review, American Economic Association, vol. 81(3), pages 497-513, June.
    5. Paul Davidson & Jan A. Kregel (ed.), 1991. "Economic PROBLEMS OF THE 1990s," Books, Edward Elgar Publishing, number 123.
    6. Kaushik Basut & Ashwini Deshpande, 1995. "The Strategic Role Of International Credit As An Instrument Of Trade," The Japanese Economic Review, Japanese Economic Association, vol. 46(4), pages 333-350, December.
    7. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    8. Santomero, Anthony M, 1984. "Modeling the Banking Firm: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 576-602, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Kaushik Basu, 2007. "Coercion, contract and the limits of the market," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(4), pages 559-579, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Suarez, Javier & Sánchez Serrano, Antonio, 2018. "Approaching non-performing loans from a macroprudential angle," Report of the Advisory Scientific Committee 7, European Systemic Risk Board.
    2. Beverly Hirtle & Anna Kovner, 2022. "Bank Supervision," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 39-56, November.
    3. Derviz, Alexis, 2013. "Bubbles, bank credit and macroprudential policies," Working Paper Series 1551, European Central Bank.
    4. Brunnermeier, Markus K. & Oehmke, Martin, 2013. "Bubbles, Financial Crises, and Systemic Risk," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 1221-1288, Elsevier.
    5. Mario Di Filippo & Angelo Ranaldo & Jan Wrampelmeyer, 2022. "Unsecured and Secured Funding," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(2-3), pages 651-662, March.
    6. Braggion, Fabio & Manconi, Alberto & Pavanini, Nicola & Zhu, Haikun, 2022. "The Value of Financial Intermediation: Evidence from Online Debt Crowdfunding," CEPR Discussion Papers 14740, C.E.P.R. Discussion Papers.
    7. Brock, Philip L., 1998. "Financial safety nets and incentive structures in Latin America," Policy Research Working Paper Series 1993, The World Bank.
    8. Niinimäki, J-P., 2019. "Credit markets under asymmetric information regarding the law," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 380-390.
    9. Martin Hellwig, 2009. "Systemic Risk in the Financial Sector: An Analysis of the Subprime-Mortgage Financial Crisis," De Economist, Springer, vol. 157(2), pages 129-207, June.
    10. Guillaume Vuillemey, 2015. "Derivatives markets : from bank risk management to financial stability [Les marchés de dérivés : gestion des risques bancaires et stabilité financière]," SciencePo Working papers Main tel-03507099, HAL.
    11. Silva, Walmir & Kimura, Herbert & Sobreiro, Vinicius Amorim, 2017. "An analysis of the literature on systemic financial risk: A survey," Journal of Financial Stability, Elsevier, vol. 28(C), pages 91-114.
    12. Nai‐Fu Chen, 2009. "Banking Reforms for the 21st Century: A Perfectly Stable Banking System Based on Financial Innovations," International Review of Finance, International Review of Finance Ltd., vol. 9(3), pages 177-209, September.
    13. Alexis Derviz, 2012. "Financial frictions and real implications of macroprudential policies," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 26(3), pages 333-368, September.
    14. Calomiris, Charles W. & Himmelberg, Charles P. & Wachtel, Paul, 1995. "Commercial paper, corporate finance, and the business cycle: a microeconomic perspective," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 203-250, June.
    15. Cull, Robert & Xu, Lixin Colin, 2000. "Bureaucrats, State Banks, and the Efficiency of Credit Allocation: The Experience of Chinese State-Owned Enterprises," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 1-31, March.
    16. Markus K. Brunnermeier & Thomas M. Eisenbach & Yuliy Sannikov, 2012. "Macroeconomics with Financial Frictions: A Survey," Levine's Working Paper Archive 786969000000000384, David K. Levine.
    17. Andreani, Ettore & Neuberger, Doris, 2004. "Relationship finance by banks and non-bank institutional investors: A review within the theory of the firm," Thuenen-Series of Applied Economic Theory 46, University of Rostock, Institute of Economics.
    18. Ozan Güler & Mike Mariathasan & Klaas Mulier & Nejat G. Okatan, 2021. "The real effects of banks' corporate credit supply: A literature review," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1252-1285, July.
    19. Fiordelisi, Franco & Scardozzi, Giulia, 2022. "Bank funding strategy after the bail-in announcement," Journal of Corporate Finance, Elsevier, vol. 74(C).
    20. Butzbach Olivier & von Mettenheim Kurt E., 2015. "Alternative Banking and Theory," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 5(2), pages 105-171, July.

    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:wly:soecon:v:65:y:1999:i:4:p:914-926. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2325-8012 .

    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.