We examine the relation between the financial health of banks and their willingness to supply capital to borrowers under previously committed credit lines. We show that during the collapse of the Asset Backed Commercial Paper market in the last quarter of 2007 and the first half of 2008, banks...

We study how the consequences of violations of covenants associated with bank lines of credit to firms vary with the financial health of lenders. Following a violation banks restrict usage of lines of credit by raising spreads, shortening maturities, tightening covenants, or cancelling the line...

We analyze whether variation in systemic risk in the banking system (also known as “bank systemic risk”) can explain corporate investment. We show that in a sample of publicly listed firms in 10 advanced and emerging markets economies during the period 1990–2013, bank systemic risk is...

In this paper, we use three measures that arguably capture two dimensions of “bank systemic risk”, namely, (1) bank funding maturity and (2) bank asset commonality, to empirically test whether bank systemic risk has a positive effect on corporate investment. We document that in a sample of...

This study focuses on physical and R&D investments to examine the effect of bank shocks on corporate investment behavior at the firm and economy levels. I use matched bank-firm lending data for listed Japanese companies from 1990 to 2013 to identify bank loan supply shocks from firms' borrowing...

We investigate hold-up problems in debt financing among publicly traded firms with apparently limited information asymmetries. Based on the prediction by Rajan (1992), we examine how changes in short-term bank loan ratio affect firm investment behavior. We confirm that, while investment by...

Extensive work is now in progress around the world to create a more stable financial system. An important part of this work is to tighten the requirements on the banks' capital adequacy. There is abundant research on optimal capital levels from the micro perspective, but few studies try to...

This paper proposes a standardised classification of business models of the European Union (EU) banks. Our work is based on a rich and unique dataset collected for the first time for the full population of EU banks at individual level. The proposed approach to classification combines both a...

We find that organization capital is negatively related to the cost of bank loans. This finding is robust to additional analyses including those that address omitted variable bias and reverse causality. In addition, we find that organization capital reduces all-in-spread-undrawn. When we...

We allow the preference of a political majority to determine boththe corporate governance structure and the division of profits betweenhuman and financial capital. In a democratic society where financialwealth is concentrated, a political majority may prefer to restraingovernance by dispersed...