Using a unique proprietary dataset from a large European commercial bank containing granular loan-level information on credit lines to mid-corporate firms, we investigate the bank’s decisions to allow firms to retain existing credit at a time of acute financial insta- bility. Our results highlight the importance of bank-firm relationships during crisis times. Existing borrowers who actively used their credit lines were not rationed, unless they posed an increased credit risk. We do not find evidence of evergreening practices.

Access to Credit in a Market Downturn.

Chiaramonte, Laura;
2022-01-01

Abstract

Using a unique proprietary dataset from a large European commercial bank containing granular loan-level information on credit lines to mid-corporate firms, we investigate the bank’s decisions to allow firms to retain existing credit at a time of acute financial insta- bility. Our results highlight the importance of bank-firm relationships during crisis times. Existing borrowers who actively used their credit lines were not rationed, unless they posed an increased credit risk. We do not find evidence of evergreening practices.
Credit lines
Credit risk
Sovereign debt crisis
Credit rationing
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11562/1079518
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