Bank Loan Pricing in the Asia-Pacific Region

Chotigeat, Tosporn; Harjoto, Maretno A.; Ha-Chin Yi
September 2009
Multinational Business Review (St. Louis University);Fall2009, Vol. 17 Issue 3, p49
Academic Journal
This study examines bank practices of corporate loan pricing in the Asia-Pacific region. We find that the all-in-spread for loans (mostly term loans with longer maturities) in the Asia-Pacific region are significantly smaller than those in the US. In addition, foreign banks tend to price their loans favorably in the Asia-Pacific region, while foreign banks in the US have a higher loan spread. This finding indicates that foreign banks foster more competitive loan pricing in the Asia-Pacific region, while foreign banks in the US seem to experience a competitive disadvantage compared to domestic lenders.


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