This paper provides comprehensive theoretical and empirical analyses on bank lending under uncertainty. Our theory differentiates uncertainty from risk and shows that uncertainty-averse banks demand a premium in loan contracting for their exposure to the uncertainty. This premium gets larger as...

We show that firms with illiquid stock pay higher syndicated loan spreads. This result is invariant to multiple measurements of stock illiquidity, and is robust to a wide set of cross-sectional loan and firm features, firm and year fixed effects. This result also holds using matched...

After the removal of geographic restrictions on branching in 2006, China’s city commercial banks (CCBs) can apply for permission to branch outside their province. This paper shows that CCBs report higher loan loss provisions before filing an application, thereby increasing the provision...