How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper … finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending … risk of firm default. …

overnight unsecured loans. Using proprietary bank-level data, we find that interbank rate uncertainty signi cantly raises … and the 2010-2012 European sovereign crisis. This effect is attenuated for banks with lower credit risk, sounder capital … positions and greater access to central bank funding. …

We take a structural approach to assessing the empirical importance of shocks to the supply of bank … one-standard-deviation shock to credit supply generates a loss of output by 1 percent …

my model to match the volatility and correlation with output of the external finance premium, bank leverage …

simulation of a bank balance sheet shock produces a downturn of a magnitude similar to the "Great Recession" … productivity shocks. It allows the model to match the volatility and correlation with output of the external finance premium, bank …

We take a structural approach to assessing the empirical importance of shocks to the supply of bank … one-standard-deviation shock to credit supply generates a loss of output by 1 percent. …

innovations to stochastic loan-to-value ratios imposed on borrowers, and supply shocks, negative innovations to stochastic bank …

conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

models of financial frictions. Banks can reject borrowers whose risk is above an endogenous threshold at which no lending … rate sufficiently compensates banks for the borrowers' default risk. Firms denied credit cut employment and labor … reallocates mostly towards safer producers. Lending standards propagate bank capital shortfalls through labor misallocation …