prepay, we show that high prepayment risk can trigger credit rationing by the bank. However, an upfront fee, which allows the … bank to lower the loan spread and therefore the prepayment risk, restores an equilibrium with funding. Large-sample tests …

An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …

A model of imperfectly competitive banks is examined under asymmetric information about borrower quality. Greater bank … empirical results on the relationship between bank competition and financial stability. The model can be used to define a …

rate decision from a bank is followed by the government guarantee institutions. Secondly, by doing the mechanism test, we …

While there is no apparent reason for loan spreads to cluster at certain numbers, we find that around 70% of bank loans … using the round-yards as focal pricing points when negotiating with their borrowers. The tacit collusion leads to higher … spreads and total costs of the round-yard-priced loans than non-round-yard-priced loans. Consistent with our tacit collusion …