This paper analyses the role of collateral in loan contracting when companies are financed by multiple bank lenders and … the view that collateral is a strategic instrument intended to influence the bargaining position of banks. Our result …

Economic theory conjectures complementarities between the ranking of creditors in formal insolvency proceedings and the … use of collateral in bank loan contracts as well as the exist-ence of relational compared to arm's length lending. In this … neither confirm that a high priority for secured lenders explains an excessive use of collateral in bank loans nor that a …