natural experiment to study the effects of reduced bank capital adequacy on productivity. Affected banks respond not only by … cutting back on lending but also by reallocating credit to firms in financial distress with prior underreported loan loss … credit reallocation leads to a reallocation of production factors across firms. A partial equilibrium exercise suggests that …

power for economic growth and bank lending in the United States and the euro area than the spot IBOR-OIS, credit default … swap spreads or bank bond credit spreads …The cost of bank funding on money markets is typically the sum of a risk-free rate and a spread that reflects rollover …