Guarantees play an important role in debt contracts. They alter the risk for the lender, transform borrowers� incentives and, possibly, modify the equilibrium allocation of financial resources. This paper studies the role of guarantees on bank loans, using a sample of over 50,000 individual...

Both macro and (still scarce) micro evidence support the idea that a new economy is emerging in the US, not (yet) in Europe. Some have argued that the inadequacies of Europe�s financial system are an important part of the explanation. This paper, after surveying the existing literature on...