A crucial condition for the existence of a credit channel through bank loans is that monetary policy should be able to … change bank loan supply. This paper contributes to the discussion on this issue by presenting empirical evidence from dynamic … the average bank reduces its lending more sharply in reaction to a restrictive monetary policy measure, the lower its …

Small and medium-sized firms often obtain capital via a mixture of relationship and arm's-length bank lending. We show … that such heterogeneous multiple bank financing leads to a lower probability of ineefficient credit foreclosure than both … monopoly relationship lending and homogeneous multiple bank financing. Yet, in order to reduce hold-up and coordination …