This study explores the effects of information asymmetry and arranger reputations on syndicated loan structures. The moral hazard problem arising from information asymmetries between borrower and syndicate can be overcome only by the most reputable arrangers. Both moral hazard and adverse selection problems appear when arrangers have an information advantage over other syndicate participants. However, the adverse selection problem arises only when low-reputation arrangers lend to opaque borrowers. (C) 2015 Elsevier B.V. All rights reserved.
|Number of pages||11|
|Journal||Journal of International Financial Markets, Institutions & Money|
|Publication status||Published - Sep 2015|
- Syndicated loans
- Syndicate structure
- Information asymmetry
- LENDING RELATIONSHIPS