This study relates financial integration to credit risk of banks in a panel of countries. Over the period of study, we compute measures of financial integration for a panel of banks and examine how they relate to the credit risk of borrowing banks. The result of an instrumental variable approach...

Banks have access to different markets for credit risk transfer (CRT), including the credit derivative and the secondary loan markets. We investigate how and why a bank chooses among these markets to hedge the credit risk of a loan. We find that banks with capital and liquidity constraints are...