designing a relationship-lending model in which a bank operates as a financial intermediary and centralised monitor.In the … absence of deposit insurance, the bank s limited liability option creates an incentive problem between the bank and its ….Hence, the bank must signal its safety to depositors by maintaining the equity ratio held.The optimal equity ratio is dynamic, ie …

recession. Consistent with the theory, the increase in bank credit in 2020Q1 and 2020Q2 came almost entirely from drawdowns by … times; and (v) pay higher spreads, even conditional on other firm characteristics. We present a theory of loan terms that …-level measures of exposure to the COVID recession. Finally, we match the bank data to a list of participants in the Paycheck …

to non-banks do not transform sight deposits into illiquid assets as intensively as savings banks with high shares of non-bank … how bank size and the individual bank's position in the interbank market affect liquid assets. -- Liquid assets ; sight …