We study how the consequences of violations of covenants associated with bank lines of credit to firms vary with the … financial health of lenders. Following a violation banks restrict usage of lines of credit by raising spreads, shortening … during the recent crisis. Banks in worse financial health are more likely to restrict access to credit lines following a …

Stability highlights the existence of trade-offs and spillovers that monetary policy and macroprudential authorities face when … deciding on their policy interventions. Monetary policy measures are key to support the supply of credit to the economy, but … in limiting financial stability risks, but they could also reduce the length of economic expansions by preventing credit …

restrictions and the credit spread as a threshold variable using the example of the Czech Republic. We find that while there is no … to differ in low and high credit spread regimes. Responses in the opposite direction (i.e. from the financial sector to … the real economy) are procyclical and similar irrespective of regime. A positive shock to credit and a negative shock to …