Abstract

http://ssrn.com/abstract=1696246
 
 

References (106)



 
 

Citations (5)



 


 



Lending Relationships and the Effect of Bank Distress: Evidence from the 2007-2009 Financial Crisis


Daniel R. Carvalho


USC Marshall School of Business

Miguel A. Ferreira


Nova School of Business and Economics; European Corporate Governance Institute (ECGI)

Pedro P. Matos


University of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI)

September 27, 2013


Abstract:     
We study the transmission of bank distress to nonfinancial firms from 34 countries during the 2007-2009 financial crisis using systemic and bank-specific shocks. We find that bank distress is associated with equity valuation losses and investment cuts to borrower firms with the strongest lending relationships with banks. The losses are not offset by borrowers’ access to public debt markets and are concentrated in firms with the greatest information asymmetry problems and with the weakest financial positions. Our findings suggest that public debt markets do not mitigate the effects of relationship bank distress during financial crises.

Number of Pages in PDF File: 57

Keywords: Lending Relationships, Bank Distress, Public Debt Markets, Financial Crisis

JEL Classification: G01, G21, G32

working papers series





Download This Paper

Date posted: October 24, 2010 ; Last revised: September 27, 2013

Suggested Citation

Carvalho, Daniel R. and Ferreira, Miguel A. and Matos, Pedro P., Lending Relationships and the Effect of Bank Distress: Evidence from the 2007-2009 Financial Crisis (September 27, 2013). Available at SSRN: http://ssrn.com/abstract=1696246 or http://dx.doi.org/10.2139/ssrn.1696246

Contact Information

Daniel R. Carvalho
USC Marshall School of Business ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
Miguel Almeida Ferreira (Contact Author)
Nova School of Business and Economics ( email )
Campus de Campolide
Lisbon, 1099-032
Portugal
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Pedro P. Matos
University of Virginia - Darden School of Business ( email )
University of Virginia
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Feedback to SSRN


Paper statistics
Abstract Views: 2,523
Downloads: 561
Download Rank: 26,511
References:  106
Citations:  5

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.281 seconds