Digital Technology, Legal Reforms, and Bank Lending
Prof. Bernard YEUNG
Emeritus Professor
Department of Finance and Department of Strategy and Policy
National University of Singapore
Date: 30 October 2025 (Thursday)
Time: 14:30-16:00
Venue: E22-G015
Host: Prof. Rachel MA, Associate Professor in Finance
Abstract
The introduction of online collateral auctions through legal reform has established a more efficient bankruptcy resolution mechanism. This technology-driven change has enhanced the ex-ante value of secured loans, influencing the supply, demand, and composition of bank lending. Using granular loan-level data and staggered Difference-in-Difference (DiD) estimations, we find a significant shift from unsecured to secured loans, particularly among private firms with greater fixed assets, stronger credit ratings, and higher reliance on external financing. Meanwhile, interest rates on unsecured loan rise, while those on secured loans remain unchanged. The effects are more pronounced in bank branches facing higher competitive pressures, where lenders expand credit to capitalize on the increased value of secured loans. Following the reform, banks increased secured lending, improved risk-adjusted interest earnings, and attracted more private-sector firms.
Speaker
Prof. Bernard Yeung is an Emeritus Professor in the Department of Finance and Department of Strategy and Policy at the National University of Singapore (NUS) Business School. He was Dean of NUS Business School from June 2008 to May 2019. Before joining NUS, he was the Abraham Krasnoff Professor in Global Business, Economics, and Management at New York University (NYU) Stern School of Business and the Director of the NYU China House. From 1988 to 1999, he taught at the University of Michigan and at the University of Alberta from 1983 to 1988.
All are welcome!
