affect the risk sensitivity of interest rates in the Norwegian credit market. We show that an increase in competition makes …

A model of imperfectly competitive banks is examined under asymmetric information about borrower quality. Greater bank … credit booms. Such equilibria are characterised by sharp increases in credit supply and deteriorations in average loan … empirical results on the relationship between bank competition and financial stability. The model can be used to define a …

Credit spreads rise after a monetary policy tightening, yet spread reactions are heterogeneous across firms. Exploiting … with high leverage experience a more pronounced increase in credit spreads than firms with low leverage. A large fraction … of this increase is due to a component of credit spreads that is in excess of firms' expected default. Our results …