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British Journal of Economics, Management & Trade, ISSN: 2278-098X,Vol.: 8, Issue.: 2


Bank Corporate Lending: A Bubble in Progress and Suggested Remedies


David Kohn1* and James S. Sagner2

1Department of Accounting, Ernest C. Trefz School of Business, University of Bridgeport, Bridgeport CT 06104, 917-633-3158, USA.
2Sagner/Marks Consulting, White Plains NY 10605, 914-686-2732, USA.

Article Information
(1) Suk Hun Lee, Finance Department, Loyola University Chicago, USA.
(1) Anonymous, India.
(2) Marco Muscettola, Italy.
(3) Anonymous, MingDao University, Taiwan.
Complete Peer review History: http://www.sciencedomain.org/review-history/9352


The causes of the Great Recession (beginning in 2008) and the solutions to prevent a recurrence have been argued over endlessly. The government has responded with various actions: e.g., the Dodd-Frank Act (2010); stronger oversight of the activities of commercial and investment banks; etc. A significant unaddressed financial concern is the process of bank lending to businesses, which is largely unrestricted as to loan policies, required collateral and other safeguards, and the strength of loan covenants that protect the bank during the duration of the loan. This article discusses the situation with regard to loan covenants and suggests various remedies.

Keywords :

Bank lending; loan covenants; cov-lite; loan agreements.

Full Article - PDF    Page 108-119

DOI : 10.9734/BJEMT/2015/18019

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