We study both theoretically and empirically the inter- dependence of lending decisions in different country branches of a multinational bank. First, we model a bank that delegates the management of its foreign unit to a local manager with non-transferable skills. The bank differs from other...

We model the evolution of stylised bank loan portfolios to assess the impact of IFRS 9 and US GAAP expected loss model (ECL) on the cyclicality of loan write-off losses, loan loss provisions (LLPs) and capital ratios of banks, relative to the incurred loss model of IAS 39. We focus on the...

I study the long-run effects of credit market disruptions on real firm outcomes and how these effects depend on nominal wage rigidity at the firm level. Exploiting variation in firms' refinancing needs during the global financial crisis, I trace out firms' investment and growth trajectories in...

We show that carbon-price shocks affect firms’ investment and emission-intensity via a debt-channel. Our identification exploits a reform-driven carbon-price surge in the EU Emission Trading System (EU-ETS) and loan-level credit registry data for Italy. Highly-exposed ETS-firms increase their...

Borrowers from the same state as the Chairman of the U.S. Senate Banking Committee, whom I term "connected", are able to borrow at spreads 14 bps lower than other borrowers. Connected borrowers' contributions toward the Chairman are influenced by their cost of loans, but the same is not true for...

Using the Emerging Market Debt Crises of the late 1990s, a shock that directly impacted some U.S. banks but not their domestic borrowers, we study the causal impact of lender health on covenant-violating borrowers. Using difference-in-differences, we find that banks exposed to the crises become...

We analyze how Credit Default Swaps (CDS) affect bank incentives and borrower outcomes in renegotiations after covenant violations. Using a regression-discontinuity design and within lender-borrower variation, we find that CDS firms maintain investment after control rights shift to the creditor,...

We examine the relation between the financial health of banks and their willingness to supply capital to borrowers under previously committed credit lines. We show that during the collapse of the Asset Backed Commercial Paper market in the last quarter of 2007 and the first half of 2008, banks...

I study the impact of Lehman Brothers' bankruptcy and resultant inability to honor its obligations as a lender under committed credit lines. Firms that lost access to a credit line committed by Lehman Brothers experienced abnormal stock returns of -3%, on average, on the day of and day after...

This study investigates the effect of bank ownership on lending and firm investment efficiencies to give reasons for the mixed evidence that exists on the impact of bank ownership on firm performance. Using China's listed firms as an example, we find that bank ownership reduces the efficiency of...