Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 15, 2021 erstellt
Beschreibung:
While there is no apparent reason for loan spreads to cluster at certain numbers, we find that around 70% of bank loans have round-yard spreads (i.e., multiples of 25 basis points). We hypothesize that dominant banks implicitly collude by using the round-yards as focal pricing points when negotiating with their borrowers. The tacit collusion leads to higher spreads and total costs of the round-yard-priced loans than non-round-yard-priced loans. Consistent with our tacit collusion hypothesis, dominant banks round up rather than round down loan spreads to multiples of yards. Moreover, round-yard pricing is more prevalent among lower-quality and non-repeat borrowers