In light of the recent financial and economic crisis the present paper analyzes the determinants of loan default. We employ a unique firm-level panel data of 700 bank loans given to small and medium sized enterprises in Slovakia between 2000 and 2005 to investigate three loan default hypothesis....

We demonstrate improvements in predictive power when introducing spline functions to take account of highly non-linear relationships between firm failure and earnings, leverage, and liquidity in a logistic bankruptcy model. Our results show that modeling excessive non-linearities yields...

Changes in credit market architecture are an important but unobservable structural influence on economic activity. For Australian data, we model non-price credit supply conditions within equilibrium correction models of consumption, house prices, mortgage credit and housing equity withdrawal....

Over the last 30 years, the business mix of banks in Canada has changed significantly. Progress in information-processing technology, legislative changes, and market forces have combined to blur the traditional distinctions between banks and other financial institutions and have allowed banks to...

This paper analyzes whether from the end of 2005 to the first half of 2012 bank localism influenced the dynamics and the quality of loans to Italian firms. To this aim, this paper proposes a new definition for local banks that, respect to the traditional classifications employed in literature,...

We describe and evaluate the measures taken by the U.S. government to rescue Fannie Mae and Freddie Mac in September 2008. We begin by outlining the business model of these two firms and their role in the U.S. housing finance system. Our focus then turns to the sources of financial distress that...

Research on bank financial intermediation in a country's narrower territorial units is scarce, in both domestic and international literature. Banks are almost the only financial intermediaries in narrower territorial units and their role is substantial, ranging from participating in regional...

We present a model in which fire sales propagate shocks across bank balance sheets. When a bank experiences a negative shock to its equity, a natural way to return to target leverage is to sell assets. If potential buyers are limited, then asset sales depress prices, in which case one bank׳s...

We study the time-varying risk exposures of US bank holding companies for the 1986–2012 period by decomposing total bank risk into systematic banking-industry risk, systematic market-wide risk, and idiosyncratic bank risk. Banking-industry risk factors directly relate to the banks’ financial...