In this paper we review the models of joint defaults of the current major industry-sponsored credit risk frameworks. Recognizing the need for further improvements of these models, we address the following issues. First, we identify the most important modeling drawbacks that could be fixed on a...

Do private banks act as hard-nosed bankers when firms get financially distressed compared to public banks that have the mandate to support regional economy? For German firms in the period 2000-2005, I find that the probability of leaving the market after financial distress is higher for firms...