We examine the impact of credit default swaps (CDS) on lending relationships and credit market efficiency. CDS insulate … threats, which can have positive implications for borrower incentives and credit availability ex ante. However, lenders may … credit constraints and be detrimental to welfare. Our analysis yields a number of empirical implications, some of which have …

correlated credit risk, the IRB rules should require 45% lower capital requirements for small business loans than what the Basel … SME Support Factor introduced by the European Commission in the current installment of the Basel regulation …

correlated credit risk, the IRB rules should require 45% lower capital requirements for small business loans than what the Basel … SME Support Factor introduced by the European Commission in the current installment of the Basel regulation …

Do policies that promote credit access have an impact on targeted borrowers? To address this question, we develop a … to an improvement in the credit score of small businesses. However, the effect vanishes in markets with high demand …-adjusted bank competition, due to weaker bank incentives for information production. In order to improve credit allocation across …

business lending during the global financial crisis. The decline in business credit was driven by increased risk overhang … elasticities suggestive of credit rationing (consistent with an increase in lender risk aversion). Nevertheless, we identify a …