Financial Innovation and Old School Metrics
This paper discusses Loan Syndications: A Secondary Market for Bank Credit. This year both the volume and number of deals in the loan syndication market have risen sharply, as evidenced by the top graph. This increase reflects the increased liquidity in bank lending as banks could sell their loans and reduce risk exposure to certain individual, sector or regional credits. The investors in these loans are broad-based, and include mutual funds, pension funds and life insurance companies. This base provides a bigger pool of buyers that gives added liquidity to this market.