Key Words: Relationship Banking, Loan Announcement Returns

We find that bank loan announcement abnormal returns have diminished considerably since 1980. Indeed, bank loan announcements produced no statistically significant abnormal returns over the 1996-2000 period. These results are consistent with the argument that increasing competition in financial markets has reduced the value of bank loan relationships. We also find that loan announcement returns are more likely to be positive for syndicated loans, and in periods of high credit risk spreads