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The riskiness of credit allocation and financial stability

Brandao Marques, Luis; Chen, Qianying; Raddatz, Claudio E. - 2019

We explore empirically how the time-varying allocation of credit across firms with heterogeneous credit quality matters … credit allocation, captured by Greenwood and Hanson (2013)'s ISS indicator, helps predict downside risks to GDP growth and … systemic banking crises, two to three years ahead. Our analysis indicates that the riskiness of credit allocation is both a …

Persistent link: https://www.econbiz.de/10012103777

The COVID-19 impact on corporate leverage and financial fragility

Haque, Sharjil Muktafi; Varghese, Richard - 2021

We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is...

Persistent link: https://www.econbiz.de/10012796218

Non-financial corporate debt in advanced economies, 2010–17

Almeida, Luiza Antoun de; Tressel, Thierry - 2020

This paper studies the evolution of non-financial corporate debt among publicly listed companies in major advanced economies between 2010 and 2017. Since 2010, firms have started to rely more on corporate bond markets and have used part of their debt to increase their holdings of cash. In our...

Persistent link: https://www.econbiz.de/10012252676

Borrowing costs and the role of multilateral development banks : evidence from cross-border syndicated bank lending

Gurara, Daniel Zerfu; Presbitero, Andrea; Sarmiento, Miguel - 2018

Cross-border bank lending is a growing source of external finance in developing countries and could play a key role for infrastructure financing. This paper looks at the role of multilateral development banks (MDBs) on the terms of syndicated loan deals, focusing on loan pricing. The results...

Persistent link: https://www.econbiz.de/10011978454

How Much Leverage is too Much, or Does Corporate Risk Determine the Severity of a Recession?

Ivaschenko, Iryna V. - 2003

Economic theory suggests that vulnerable financial conditions of the corporate sector can trigger or worsen an economy …

Persistent link: https://www.econbiz.de/10014399690

Managerial Entrenchment and the Choice of Debt Financing

Sy, Amadou N. R. - 1999

firm’s credit risk is low, management issues public bonds because of the value gains from increased flexibility rather than … restrictions are selectively relaxed. In contrast, when credit risk is high, management issues private debt because of the value …

Persistent link: https://www.econbiz.de/10014400172

Credit Risk Spreads in Local and Foreign Currencies

Wiener, Zvi - 2009

The paper shows how-in a Merton-type model with bankruptcy-the currency composition of debt changes the risk profile of a company raising a given amount of financing, and thus affects the cost of debt. Foreign currency borrowing is cheaper when the exchange rate is positively correlated with the...

Persistent link: https://www.econbiz.de/10014403081

External Capital Structure : Theory and Evidence

Lane, Philip R. - 2000

Recent years have witnessed a change in the composition of capital flows to developing countries, and FDI and equity flows have been playing an increasing role. In this paper we discuss the challenges for international macroeconomics that these developments pose and characterize stylized facts...

Persistent link: https://www.econbiz.de/10014403502

Collateral in Loan Classification and Provisioning

Song, Inwon - 2002

Adequate loan classification practices are an essential part of a sound and effective credit risk-management process in … a bank. Failure to identify deterioration in credit quality in a timely manner can aggravate and prolong the problem …

Persistent link: https://www.econbiz.de/10014399648

Bank Lending Rates and Financial Structure in Italy : A Case Study

Ferri, Giovanni - 1995

This paper discusses the relation between the financial structure and the determination of bank lending rates in Italy. It notes that the high degree of stickiness of bank lending rates observed in Italy in the past was related to constraints on competition within the banking and financial...

Persistent link: https://www.econbiz.de/10014398373