Economic theory conjectures complementarities between the ranking of creditors in formal insolvency proceedings and the … use of collateral in bank loan contracts as well as the exist-ence of relational compared to arm's length lending. In this … paper we seek evidence for the-se hypotheses taking France and Germany as examples which differ significantly concerning the …

, but tend not to face higher interest rates because they provide collateral. This paper illustrates these effects in a … model and tests the hypotheses derived by exploiting the introduction of a "fresh start" policy in Germany in 1999 as a …