We develop a double moral hazard model that predicts that the use of project finance increases with both the political risk of the country in which the project is located and the influence of the lender over this political risk exposure. In contrast, the use of project finance should decrease as...

With great power comes great responsibility. Although the world's leading financial institutions are unlikely to be mistaken for superheroes, they would do well to remember that maxim as they rush to cast themselves as champions of sustainable development. Leading lenders have been quick to...

In the recent theoretical literature on lending risk, the coordination problem in multi-creditor relationships have been analyzed extensively. We address this topic empirically, relying on a unique panel data set that includes detailed credit-file information on distressed lending relationships...