Dragon Yongjun TANG
Prof. Dragon Yongjun TANG
金融學
Associate Director, Centre for Financial Innovation and Development
Professor

2219 4321

KK 1004

Publications
Do banks still monitor when there is a market for credit protection?

The rise of credit default swaps (CDS) provides creditors with a market-based approach to obtaining protection, but it can also affect lenders' monitoring of the borrowers. We find that after CDS begin trading on a given firm, new loans to that firm are less likely to require collateral and have less strict financial covenants, even controlling for endogeneity. The effects are stronger when lenders have easier access to CDS, for safer firms, credit lines, and performance-based covenants. Our evidence is consistent with the theory that the introduction of CDS trading makes loan contracting more effective for better quality borrowers.

Going for green: How green bonds benefit shareholders

Demand for green bonds has grown in leaps and bounds since the market was launched in 2007. Beyond the important environmental projects they fund, they also bring benefits to shareholders.