earticle

영어

This study scrutinized the relationship between the network and the cost of credit in syndicated loans. The purpose of this paper is to undertake banks’ use of microscopic information of firms and macroscopic transmission caused by the syndicated loan market when decision-making situations. The monthly inter-bank networks are constructed via the similarity of the bank’s loan portfolio, using the syndicated loan provided by Thomson Reuter´s Dealscan from 2000 through 2020. First of all, we show the positive relationship between bank degree and realized volatility of the bank. During global financial crises, such as the 2007-2008 crisis and the COVID-19 pandemic, risk exposure is higher than those in pre-crisis periods. These results imply that interbank networks reflect exogenous shocks to the global financial system. In addition, We find that the coefficient on lender’s degree centrality is positive and statistically significant at the 1% level in the loan spreads after controlling the characteristics of the bank and with the lender country- , firm industry-, and year-fixed effects. In other words, banks with higher network exposure cause higher interest rates of loan agreements concerning risk-return trade-offs. These results imply that connectedness based on the similarity of loan portfolio reflects the risk and return of the bank. This paper broadens our perspective of the matching mechanisms between banks and firms for assessing the banks’ quality and pinpointing an informational channel involving the relationship by the concept of a complex network.