We model EU countries' bank ratings using financial variables and allowing for intercept and slope heterogeneity. Our …

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having … defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information … about a firm's type to its competitors. Thereby, asymmetric information between banks is reduced and bank competition …

, small, and innovative firms) have a multitude of bank lenders, where one may be special in the sense of relationship lending …. However, theory does not tell us a lot about the economic rationale for relationship lending in the context of multiple bank … financing. To fill this gap, we analyze the optimal debt structure in a model that allows for multiple but asymmetric bank …

Because of secrecy, little is known about the political economy of central bank lending. Utilizing a novel, hand … unprecedented government bailout of the central bank, and resulted in loss of shareholder control over the central bank. …

conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

systemically important financial institutions. We propose a bank default risk model, in the vein of the classic Merton-type, which …

An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …