The U.S. government uses its voting power to direct IMF funds to countries where U.S. banks stand to lose the most from sovereign default -- a de facto bailout. Consistent with this, the likelihood a defaulting sovereign is granted an IMF loan is increasing in U.S. banks' exposure to that...

Firms hold less cash (i.e. internal-liquidity) when their local bank branching network is dense. The effect strengthens for small, opaque and financially constrained firms. Further, it weakens with distance and strengthens with urban vibrancy. Finally, firms located in dense local branch...