of lenders not observing a borrower's true credit score but only seeing an aggregate credit category. We find that … borrower's credit score. This inference is economically significant and allows lenders to lend at a 140-basis-points lower rate … for borrowers with (unobserved to lenders) better credit scores within a credit category. While lenders infer the most …

Using detailed data of all German banks, we find that banks which have suffered heavy credit losses reduce their … assumption of constant leverage. Weakly capitalized banks grant fewer new loans than other banks. We control for credit demand …

degree of credit/maturity transformation. We develop a dynamic model in which an entrepreneur borrows from overlapping …-generation households via layers of funds, forming a credit chain. Each intermediary fund in the chain faces rollover risks from its lenders …. We show that the equilibrium chain length minimizes the run risk for any given contract and find that restricting credit …