Interbank syndicated lending

Abstract

We study syndicated lending among financial intermediaries, focusing on interactions between banks and non-bank financial intermediaries (NBFIs) around the Global Financial Crisis (GFC). Using granular loan-level data for more than 80,000 lender-borrower relationships across more than 100 countries, we decompose the growth of syndicated lending into lender-side and borrower-side components following a matched fixed-effects approach, controlling for differences between domestic and cross-border relationships. We document a marked reallocation of syndicated credit toward NBFIs during the GFC, in both domestic and cross-border markets, driven almost entirely by borrowers’ rather than lenders’ characteristics. These results point to the importance of monitoring non-bank borrowers’ characteristics within the financial sector.