Bank Lending and the Securitisation Process: A Comparative Analysis

Andrea Landi and Giuseppe Lusignani

Chapter Chapter 5 in The Recent Evolution of Financial Systems, 1997, pp 91-122 from Palgrave Macmillan

Abstract: Abstract The role and the importance of banks in providing funds to the economy has been analysed from different perspectives with various possibilities for the future of bank lending. On the one hand, the long-term evolution of financial systems through securitisation and financial innovation processes may decrease the importance of banks in the financing of the economy. The introduction of new financial instruments traded in efficient open markets increases, for borrowers, the possibility of raising funds direct from private and institutional investors. Firms with high-quality standing in the market are more capable of substituting bank loans with new financial instruments which are subscribed directly by investors and are traded in efficient secondary markets. This may result in a long-term reduction in bank lending and an increasing role for financial markets in providing funds to the borrowers (Rybczynski 1984).

Keywords: Cash Flow; Commercial Bank; Bank Loan; Security Market; Bank Credit (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-14192-0_5

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DOI: 10.1007/978-1-349-14192-0_5

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