Public banks face a public contract to provide credit access to firms and households within their business district. Closely related to that, cooperative banks aim to support their members. Both are asked to finance projects as long as economically sustainable. Bank owners grand additional...

Do private banks act as hard-nosed bankers when firms get financially distressed compared to public banks that have the mandate to support regional economy? For German firms in the period 2000-2005, I find that the probability of leaving the market after financial distress is higher for firms...