We study how debt market frictions that constrain the ability of firms to buffer a tightening in bank credit supply … spreads as bank credit tightens. The impact is stronger among smaller firms, lower rated firms, and firms relying more on bank …

estimate the impact of foreign bank presence on the level and volatility of real credit in a panel of eight Latin American … bank presence has contributed to reduce real credit volatility, improving the buffer shock function of the banking sector … quality assets and having access to a broad set of liquidity sources. -- foreign banks ; credit volatility ; Latin America …