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This study examines bank-specific factors that determine nonperforming loans (NPLs) in Ukraine. Analysis of an unbalanced sample of 207 banks from 2008 to 2020 reveals that the NPLs of banks increase with related lending, suggesting that related lending is detrimental to the soundness of bank loans owing to the standard information advantage that can be offset by the bank's conflict of interest in banking relationships. Moreover, a positive shock to NPLs causes a substantial increase in related lending. These results highlight the importance of close monitoring of banks' lending practices to related parties for suppressing excessive risk-taking behavior of banks. • Banks' nonperforming loans (NPLs) increased with related lending. • Related lending is detrimental to the soundness of bank loans in Ukraine. • Loan concentration effect on NPLs is ambiguous. • Positive shock to NPLs increases related lending and decreases loan concentration. • Closely monitoring related party lending suppresses risk-taking and moral hazard. [ABSTRACT FROM AUTHOR]

This article summarizes recent studies on regional financial arrangements (RFAs) and examines the role played by global multilaterals and RFAs in emerging crises. We also review the major RFAs with regard to their basic organizational structure, activities, legal framework, and lending facilities. Finally, we discuss the attributes needed for the sustainable development of RFAs and we look at how they can expand their role for economic cooperation in the associated regions. [ABSTRACT FROM AUTHOR]

This article examines the lending decisions of Korean banks after they acquire loan portfolios from failed banks. We find that a firm's pre-existing relationships positively affect the continuation of those relationships, and that pre-existing relationships negatively impact increases in loan size, once those relationships are maintained. These results suggest that banks have a conflict of interest that comes with pre-existing lending relationships, and that bank quality does not necessarily convey the risk classes of its client firms. [ABSTRACT FROM AUTHOR]

This paper highlights a dark side of banking relationships by elucidating the conditions under which a pre-existing relationship between a lending bank and a borrower can be detrimental to positive valuation effects of loan announcements. The effect of a pre-existing relationship is more likely to be negative when the pre-existing loans are large and firms' screening costs are low. A theoretical model shows that loan announcement's positive effect on borrowers' value due to the standard information advantage can be more than offset by the bank's conflict of interest when the bank's asset quality reputation is poor, i.e. when the probability of the bank holding a bad loan is large. [ABSTRACT FROM AUTHOR]