Research-based policy analysis and commentary from leading economists
From credit risk to pipeline risk: Why loan syndication is a business that is risky
Max Bruche, Frederic Malherbe, Ralf R Meisenzahl 11 2017 september
Syndicated loan issuance is continuing to grow significantly throughout the last 25 years. On the duration, the syndicated loan business structure has developed, impacting the type for the associated risks that organizing banking institutions are confronted with. This line presents the style of ‘pipeline’ risk –the risk associated with advertising the loans throughout the syndication procedure. Pipeline danger forces organizing banking institutions to put on much bigger shares of extremely dangerous syndicated term loans, which results in reduced lending by the bank that is arranging just when you look at the syndicated term loan market, however in other people aswell. Continue reading Syndicated loan issuance is continuing to grow significantly throughout the last 25 years.