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Working Paper

Loan Sales, Implicit Contracts, and Bank Structure

We document some recent changes in the market for loan sales. We use a Tobit model to characterize the determinants of loan sales and purchases by banks, relating quantities bought and sold to bank size, capital, risk, and funding mode. The results, though not definitive, broadly confirm the Pennacchi model of sales. Other data cast doubt on the importance of mergers and acquisitions for this market and on the comparability of different data sources.

Suggested Citation

Haubrich, Joseph G., and James B. Thomson. 1993. “Loan Sales, Implicit Contracts, and Bank Structure.” Federal Reserve Bank of Cleveland, Working Paper No. 93-07. https://doi.org/10.26509/frbc-wp-199307