, we exploit an exogenous change in the contract structure in 2003, the piece rate increasing from 20.2 to 22.9 euros. We …

lending, borrower quality and collateral as a key variable in loan contract design. We used a unique data set based on the … examination of credit files of five leading German banks, thus relying on information actually used in the process of bank credit … decision-making and contract design. In particular, bank internal borrower ratings serve to evaluate borrower quality, and the …