In the leveraged loan sector, firms borrowing from non-banks have worse profitability and lower investment following loan origination, than observably similar firms borrowing from banks. Further, we find that non-banks are more likely to impose Capex restrictions. The effects are absent in the...

Natural disasters may cause extensive damage to local communities. In 2021, the historically low-temperature snowstorm Uri hurt Texas by disrupting business and activities, constraining energy distribution and consumption, and preventing residents from accessing critical resources. To mitigate...

We develop a model that explains two stylized facts - the coarseness of credit ratings relative to the underlying default probabilities, and the countercyclical nature of ratings imprecision. The imprecise nature of coarse ratings arises from the revenue-maximizing behavior of rating agencies,...

We examine the impact of uncertainty on loan contract terms for UK public and private firms, using the 2016 Brexit referendum as an exogenous shock to uncertainty. We find that uncertainty leads to a higher cost of borrowing in the syndicated loan market for private firms relative to public...

An increase in borrowers’ collateral availability can reduce the need for soft information acquisition by banks. I test this hypothesis using reforms which expanded the set of pledgeable assets in secured lending and find heterogeneous effects in the cross-section of banks. Relationship...