In recent years, assets of non-bank financial intermediaries (NBFIs) have grown significantly relative to those of … banks. These two sectors are commonly viewed either as operating in parallel, performing different activities, or as … substitutes, performing substantially similar activities, with banks inside and NBFIs outside the perimeter of banking regulation …

dimensions: (i) the role of under-capitalized banks, (ii) effects on zombie firms, and (iii) spillovers and distortions for non …

Over the past two decades, banks have increasingly focused on offering contingent credit in the form of credit lines as … a primary means of corporate borrowing. We review the existing body of research regarding the rationales for banks … repay credit lines are put options issued by banks, which are exercised by firms in a correlated manner during periods of …

We build a model with heterogeneous firms and banks to analyze how policy affects credit allocation and long …-term economic outcomes. When firms are hit by small negative shocks, conventional monetary policy can restore efficient bank lending … forbearance towards banks to stabilize the economy. Aggressive accommodation runs the risk of introducing zombie lending and a …

We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits that … seek safety in state-owned public sector banks (PSBs). We trace the consequences of this reallocation using granular data … on bank-firm relationships and branch balance sheets. The flight to safety is not a flight to quality. Lending shrinks …

macroeconomic risk, investors reduce direct investment and hold more bank deposits. This ‘flight to quality’ leaves banks flush with … liquidity. Inside banks, given lack of observability of effort, loan officers (or risk takers) are compensated based on the … volume of loans but are penalized if banks suffer a high enough liquidity shortfall. Outside banks, when there is heightened …

private sector bank branches in districts with greater exposure to state-owned banks experienced deposit withdrawals and …We analyze the performance of Indian banks during 2007-09 relative to their vulnerability to a crisis measured using … pre-crisis data, in order to study the impact of government guarantees on bank performance during a crisis. Using bank …

governments "kicked the can down the road" by providing banks with guarantees instead of full-fledged recapitalizations. We adopt … their consequences. We find that forbearance caused undercapitalized banks to shift their assets from loans to risky …, eventually, greater reliance on liquidity support from the European Central Bank …

We study the crash of bank stock prices during the COVID-19 pandemic. We find evidence consistent with a "credit line … drawdown channel". Stock prices of banks with large ex-ante exposures to undrawn credit lines as well as large ex-post gross … drawdowns decline more. The effect is attenuated for banks with higher capital buffers. These banks reduce term loan lending …

behavior. By paying out dividends, a bank transfers value to its shareholders away from creditors, among whom are other banks …. This way, one bank's dividend payout policy affects the equity value and risk of default of other banks. When such negative …In spite of mounting losses banks continued to pay dividends during the crisis. We present a model that addresses this …