Loan syndication suffers from two types of agency problems – an adverse selection problem (lead arrangers pass on bad loans to the participants) and a moral hazard problem (lead arrangers shirk on their costly monitoring duties). Therefore, a lead arranger has to take a big share of the loan...

Does hedging motivate CDS trading and does that affect the availability of credit? To answer these questions we couple comprehensive bank-firm level CDS trading data from the Depository Trust and Clearing Corporation with the German credit register containing bilateral bank-firm credit...