not subject to the interest deduction limitation, making banks preferred holders of tax-exempt debt. U.S. banks used tax …-exempt debt to reduce their tax liabilities by roughly 20% in the 1950s and 45% in the 1960s, rising to as much as 80% by the … reduced their holdings of tax-exempt debt, particularly among banks most severely impacted by the rule change …

and borrowers ample reason to care whether nonperforming debts are restructured. One implication of the way in which debt … argument is moral hazard, but (unlike in much of the recent literature of emerging market debt problems) what is central here …

We analyze government interventions to alleviate debt overhang among banks. Interventions generate two types of rents …

Fire sales are forced sales of assets in which high-valuation bidders are sidelined, typically due to debt overhang …