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Wang, Jialan; Yang, Jeyul; Iverson, Benjamin; Kluender, … - 2020

We examine the impact of the COVID-19 economic crisis on business and consumer bankruptcies in the United States using real-time data on the universe of filings. Historically, bankruptcies have closely tracked the business cycle and contemporaneous unemployment rates. However, this relationship...

Persistent link: https://www.econbiz.de/10012511297

Zombie lending to U.S. firms

Favara, Giovanni; Minoiu, Camelia; Pérez, Ander - 2024

We show that U.S. banks do not engage in zombie lending to firms of deteriorating profitability, irrespective of capital levels and exposure to such firms. In contrast, unregulated financial intermediaries do, originating more and cheaper loans to these firms. We establish these results using...

Persistent link: https://www.econbiz.de/10015053781

Global macro-financial shocks and expected default frequencies in the euro area

Castrén, Olli; Dées, Stéphane; Zaher, Fadi - 2008

Modelling the link between the global macro-financial factors and firms’ default probabilities constitutes an elementary part of financial sector stress-testing frameworks. Using the Global Vector Autoregressive(GVAR) model and constructing a linking satellite equation for the firm-level...

Persistent link: https://www.econbiz.de/10011604921

The failure of Northern Rock : a multi-dimensional case study

Bruni, Franco (ed.); Llewellyn, David T. (ed.) - 2009

In August 2007 the United Kingdom experienced its first bank run in over 140 years. Although Northern Rock was not a particularly large bank (it was at the time ranked 7th in terms of assets) it was nevertheless a significant retail bank and a substantial mortgage lender. In fact, ten years...

Persistent link: https://www.econbiz.de/10011705347

How costly is corporate bankruptcy for top executives?

Eckbo, B. Espen; Thorburn, Karin S.; Wang, Wei - 2012

We examine chief executive officer (CEO) career and compensation changes for large firms filing for Chapter 11. One-third of the incumbent CEOs maintain executive employment, and these CEOs experience a median compensation change of zero. However, incumbent CEOs leaving the executive labor...

Persistent link: https://www.econbiz.de/10009625392

Macroeconomic impact on expected default frequency

Åsberg, Per (contributor); Shahnazarian, Hovick (contributor) - 2008

We use a vector error correction model to study the long-term relationship between aggregate expected default frequency and the macroeconomic development, i.e. CPI, industry production and short-term interest rate. The model is used to forecast the median expected default frequency of the...

Persistent link: https://www.econbiz.de/10003618542

Impact of legislation on credit risk : how different are the UK and Germany?

Schmieder, Christian; Schmieder, Philipp; Kraemer-Eis, … - 2010

The analysis of credit risk and its impacting factors are important topics for the European Investment Fund (EIF, the Fund) as the Fund provides guarantees to financial institutions for portfolios of loans and leases to micro- and small and medium sized-enterprises (SMEs). In this context, the...

Persistent link: https://www.econbiz.de/10011862434

Bankruptcy resolution and the restoration of priority of claims

Capkun, Vedran; Weiss, Lawrence A. - 2016

We present new evidence on the violation of priority of claims in bankruptcy and recovery rates for secured creditors, unsecured creditors, equity holders using a sample of firms that filed for Chapter 11 bankruptcy between 1993 and 2004. Our study reveals a number of new insights: First, we...

Persistent link: https://www.econbiz.de/10011616846

COVID-19 and SME failures

Gourinchas, Pierre-Olivier; Kalemli-Ozcan, Sebnem; … - 2020

We estimate the impact of the COVID-19 crisis on business failures among small and medium-size enterprises (SMEs) in seventeen countries using a large representative firm-level database. We use a simple model of firm cost minimization and measure each firm's liquidity shortfall during and after...

Persistent link: https://www.econbiz.de/10012392364

The COVID-19 insolvency gap : first-round effects of policy responses on SMEs

Dörr, Julian; Murmann, Simona; Licht, Georg - 2021

COVID-19 placed a special role to fiscal policy in rescuing companies short of liquidity from insolvency. In the first … focusing on firms’ pre-crisis financial standing, we estimate the extent to which the policy response induced an insolvency gap … measures being focused on smaller firms, we also examine whether this insolvency gap differs with respect to firm size. Based …

Persistent link: https://www.econbiz.de/10012434436