Does hedging motivate CDS trading and does that affect the availability of credit? To answer these questions we couple … comprehensive bank-firm level CDS trading data from the Depository Trust and Clearing Corporation with the German credit register … containing bilateral bank-firm credit exposures. We find that following the Small Bang in the European CDS market, extant credit …

interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank’s credit risk exposure … credit risk. Under the substitution approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its …

Using detailed data of all German banks, we find that banks which have suffered heavy credit losses reduce their … assumption of constant leverage. Weakly capitalized banks grant fewer new loans than other banks. We control for credit demand …

Correlated defaults and systemic risk are clearly priced in credit portfolio securities such as CDOs or index CDSs. In …

Firms with credit-default swaps (CDS) traded on their debt may face "empty creditors" as hedged creditors have less … bank-firm CDS net notional and credit exposures we find that the probability of default for CDS firms drops when the effect … concentration of the firm's debt. Firms with longer credit relationships, with higher average collateral ratios of their debt, and …

We analyze the relation between market-based credit risk interconnectedness among banks during the crisis and the … security level and the credit register from Germany. We find asymmetries both cross-sectionally and over time: when banks face … in securities related to troubled classes have a higher credit risk interconnectedness. Overall, our results suggest that …

The US credit boom has been identified as one of the causes of the global financial crisis and the resulting debt … overhang is seen as the primary reason for the weak economic recovery. Most of the existing literature links the credit boom to … non-financial private sector had been originated by shadow banks. Consequently, dampening credit creation by the …

Using a comprehensive dataset from German banks, we document the usage of sovereign credit default swaps (CDS) during …