Insurers Are Very Careful Nonbank Lenders: Economists
November 20, 2019 by Allison Bell
Insurers may be a bad alternative for corporate borrowers who think bankers are bunch of boring old fuddy-duddies.
Insurers are very careful lenders themselves, and the maturities of their loans tend to be much longer, according to three economists who have studied nonbank lending.
The economists — Sergey Chernenko of Purdue University, Isil Erel of Ohio State University, and Robert Prilmeier of Tulane University — put their findings in a working paper that’s now available, behind on a paywall, on the website of the National Bureau of Economic Research.
A working paper is a preview version of a research paper. It may not have gone through the full academic peer review process.
Banks must give detailed lending reports to bank regulators, in part because the Federal Deposit Insurance Corp. gets a say over bank operations in exchange for insuring bank customers’ deposits.