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| Author: | Frenandez, R. Ozler, S. |
| Title: | Debt concentration and bargaining power: large banks, small banks, and secondary market prices |
| Journal: | International Economic Review
1999 : MAY, VOL. 40:2, p. 333-355 |
| Index terms: | BARGAINING POWER BANKS |
| Language: | eng |
| Abstract: | Commercial bank debts of developing countries are held by large international banks and smaller domestic banks. This paper investigates how debt concentration -- the proportion of a country's debt held by large banks relative to small banks -- affects the secondary market price for these loans. The authors find that countries with higher concentrations have higher secondary-market prices. The authors explain this empirical finding in a bargaining model that endogenizes the maximum penalty that banks can credibly impose on a recalcitrant debtor. |
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