TY  - JOUR
AU  - Gorton,Gary
AU  - Pennacchi,George
TI  - Banks and Loan Sales:  Marketing Non-Marketable Assets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3551
PY  - 1990
Y2  - December 1990
UR  - http://www.nber.org/papers/w3551
L1  - http://www.nber.org/papers/w3551.pdf
N1  - Author contact info:
Gary B. Gorton
Yale School of Management
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
Fax: 203/432-8931
E-Mail: Gary.Gorton@yale.edu

George Pennacchi
College of Business
University of Illinois
4041 BIF, Box 25, MC520
515 E. Gregory Drive
Champaign, IL 61820
Tel: 2172440952
Fax: 2172443102
E-Mail: gpennacc@illinois.edu
M2  - featured in NBER digest on 1991-04-01
AB  - A defining characteristic of bank loans is that they are not resold once created. Yet, in 1989 about $240 billion of commercial and industrial loans were sold, compared to trivial amounts five years earlier. Selling loans without explicit guarantee or recourse is inconsistent with theories of the existence of financial intermediation. What has changed to make bank loans marketable? In this paper we test for the presence of implicit contractual features of bank loan sales contracts that could explain this inconsistency. In addition, the effect of technological progress on the reduction of information asymmetries between loan buyers and loan sellers is considered. The paper tests for the presence of these features and effects using a sample of over 800 recent loan sales.
ER  -