An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …

distress. Relative to outside loans in distress, relationship loans in distress have lower maturity. The fraction of bank …

How does bank distress impact their customers' probability of default and trade credit availability? We address this … question by looking at a unique sample of German firms from 2000 to 2011. We follow their firm-bank relationships through times … of distress and crisis, featuring the different transmission of bank distress shocks into already weakened firm balance …

the bankruptcy code in Germany, that effectively removes their potential impact on CDS firms. Using a unique dataset on … bank-firm CDS net notional and credit exposures we find that the probability of default for firms with CDS traded on them …

the bankruptcy code in Germany that effectively removes their potential impact on CDS firms. Using a unique dataset on … bank-firm CDS net notional and credit exposures we find that the probability of default for CDS firms drops when the effect …

An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …

relationship bank affects the incidence of forbearance lending and soft budget constraints by signaling its credit decision to … other creditors. We find that the relationship bank's signaling ability enhances its incentives to engage in forbearance …

that due to its size, a large bank receives a more precise signal about the overall liquidity development in the banking … sector. In an upcoming liquidity shortage this large bank can exploit its informational advantage in the spot money market by … rationing liquidity. Using forward contracts, the large bank can credibly commit not to squeeze small banks in the event of a …