natural experiment to study the effects of reduced bank capital adequacy on productivity. Affected banks respond not only by … cutting back on lending but also by reallocating credit to firms in financial distress with prior underreported loan loss … credit reallocation leads to a reallocation of production factors across firms. A partial equilibrium exercise suggests that …

debt in China, and the corresponding burden on banks of impaired assets. It finds that such techniques can play a role, but …

regulation than for other banks and firms. Over a longer twenty-year horizon, we find that changes in the systematic risk of bank … equity have real economic consequences: increases in banks' cost of capital are associated with tightening in credit supply …