the results depend on factors such as the severity of a credit crisis, the strength of the firm-bank relationship and the …In deciding whether to roll over a loan, a relationship bank that has imperfect private information about its borrowers … relationship bank if the firm is unable to find alternative lenders. This paper explores the differential effects of this trade …

We estimate a structural model of bank portfolio lending and find that the typical U.S. community bank reduced its … business lending during the global financial crisis. The decline in business credit was driven by increased risk overhang … effects (consistent with a reduction in the liquidity of assets held on bank balance sheets) and by reduced loan supply …