I examine the role of financial covenants in private debt contracts. I predict that financial covenants help limit ex ante uncertainty about the borrower's performance - the risk that the borrower will default on the loan - in the contract. I find that covenant inclusion is positively related to...

Small and medium size enterprises (SMEs) of southern euro-area economies (e.g. Italy, Spain) pay significantly higher borrowing rates than their peers of the core (e.g. Germany, France) and this divergence is widening. It is argued that severe market failures prevent SMEs in southern euro area...

Small and medium size enterprises (SMEs) of southern euro-area economies (e.g. Italy, Spain) pay significantly higher borrowing rates than their peers of the core (e.g. Germany, France) and this divergence is widening. It is argued that severe market failures prevent SMEs in southern euro area...