This paper examines the relation between the new markets for credit default swaps (CDS) and banks' pricing of syndicated loans to U.S. corporates. We find that changes in CDS spreads have a significantly positive coefficient and explain about 25% of subsequent monthly changes in aggregate loan...

This paper investigates whether, and through which channel, the active use of credit derivatives changes bank behavior in the credit market, and how this channel was affected by the crisis of 2007–2009. Our principal finding is that banks with larger gross positions in credit derivatives...

Internal credit ratings are expected to gain in importance because of their potential use for determining regulatory capital adequacy and banks' increasing focus on the risk-return profile in commercial lending. Whereas the eligibility of financial factors as inputs for internal credit ratings...

We investigate how public and private information drives corporate CDS spreads before rating announcements. We find that CDS spreads of firms with higher news intensity move significantly earlier and stronger before rating announcements, which can be explained with public information from daily...

We investigate the relationship between borrower risk and loan maturity in small business lending. Using a rich dataset on new loans extended to German firms, we find a robust, significantly positive, monotonic risk-maturity relation. We show that this relation becomes stronger when asymmetric...