Healthy banks are crucially important for smooth lending. Correspondingly, bank regulations including Basel III intend … especially during the transition period. Using data on firm-bank relationships in Germany between 2005 and 2007, we show that the … debt ratio of banks is related to the bank loan risk. In order to assess the potential effect of tighter capital …

This paper addresses the credit channel in Germany by using aggregate data. We present a stylized model of the banking …. Applying a vector error correction model (VECM), we estimate the response of bank loans after a monetary policy shock taking … into account the reaction of the output level and the loan rate. We estimate our model to characterize the response of bank …

We analyze securities trading by banks during the crisis and the associated spillovers to the supply of credit. We use … credit register from Germany. We find that - during the crisis - banks with higher trading expertise (trading banks) increase …-rated and long-term securities. Moreover, trading banks reduce their credit supply, and the credit crunch is binding at the firm …