Financial contracts are strongly influenced by the perception that transacting parties have of each other. Hence, if contracting counterparties such as banks perceive that there is a difference in the likelihood that CEOs with conservative and liberal political orientation will discharge their...

We use unique features of the private credit market to examine whether currency risk is a priced systematic risk at the firm level and, therefore, whether and how it affects firms’ financing. We find that currency exposure has a large impact on loan spreads. Decomposing loan spreads, we find...

Bank credit constraints can reduce firms' ability to borrow to fund hedging and counterparties' capacity to provide hedging services, thus affecting post-hedging outcomes. We find that a one-standard-deviation tighter credit standards increases (post-hedging) exchange rate exposure by 10%. This...