We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … take on high leverage safely; supply chain effects compel them to do so. Firms with low leverage also arise naturally, as … framework underlie our model, we can quantify the impact capital regulation and other government interventions have on leverage …

. By looking at 5,500 issues over the period 2005-2012, we find that in recent years the sovereign debt market turbulence … premium due to the negative spillovers from the sovereign debt crisis, while German firms got a discount of 40 basis points. …

issuer firms expand their total assets and fixed assets, and also raise their leverage …

their leverage …

-post performance, we find that issuer firms expand their total assets and fixed assets, and also raise their leverage. …

The literature on market timing of long-term debt issuance yields mixed evidence that managers can successfully time … their debt-maturity issuance. The early results that are indicative of debt-maturity timing are not robust to accounting for … structural breaks or to other measures of debt maturity from firm-level data that account for call and put provisions in debt …