Since the Great Depression in 1929, economists have never stopped soul-searching for the lessons to be drawn from the crisis. But mainstream reflections have been misguided, confined to stereotypical targets of blame such as “lax regulation,” “policy mistakes” and “underestimation of...

We examine the lending behaviour of small and large banks in the Eurozone during the sovereign debt crisis. Relative to large banks, small banks are less pro-cyclical in that they exhibit more stable lending growth across credit expansion and contraction periods. In peripheral countries, the...

In this paper we investigate the price discovery process in single-name credit spreads obtained from bond, credit default swap (CDS), equity and equity option prices. We analyse short term price discovery by modelling daily changes in credit spreads in the four markets with a vector...