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 …

, the equilibrium loan rate spread increases, which raises bank profitability and the market-to-book value of bank capital … model’s dynamic implications in a panel VAR estimation, which suggests that bank lending has even increased in the long …

In this paper we model the volatility of the spread between the overnight interest rate and the central bank policy … is the main determinant of the volatility of the policy spread, but also that private bank credit risk has become more …

indeed been succesful in stimulating the credit flow of banks to the private sector. Second, we find support for the "bank … effect). The role of bank capital is, however, ambiguous. Besides the above favorable direct effect on loan supply, lower … levels of bank capitalization at the same time mitigate the size, retail and liquidity effects of the policies. The drag on …

Small businesses (SMEs) depend on banks for credit. We show that the severity of the Eurozone crisis was worse in … countries where firms borrowed more from domestic banks ("domestic bank dependence") than in countries where firms borrowed more … from international banks. Eurozone banking integration in the years 2000-2008 mainly involved cross-border lending between …