What is Different about International Lending?

Chowdhry, B (1991) What is Different about International Lending? Review of Financial Studies, 4 (1). pp. 121-148. ISSN 0893-9454

Full text not available from this repository. (Request a copy)


An attempt is made to explain how enforceability is achieved in international debt contracts. Each bank announces the policy of denying credit to borrowers who default and chooses to adhere to it to maintain its reputation of being a tough bank to discipline its other borrowers. Loans are made by syndicates of banks in order to make the penalty for default severe enough so borrowers would choose not to default voluntarily. The model predicts that the interest rate charged on loans is smaller for the larger borrowers. Also, for any given borrower, the interest rate may fall after each successive default.

Item Type: Article
Additional Information: The research article was published by the author with the affiliation of UCLA Anderson School
Subjects: Finance
Date Deposited: 03 Aug 2023 20:51
Last Modified: 03 Aug 2023 20:51
URI: https://eprints.exchange.isb.edu/id/eprint/1825

Actions (login required)

View Item
View Item