Bank Size, Reputation, and Debt Renegotiation
30 Pages Posted: 24 May 2011 Last revised: 23 May 2022
Date Written: September 1988
This paper examines the effect that the coexistence of small and large banks, with different interests in the international market, has on the debt renegotiation process. Making use of a reputational model, we argue that the presence of small banks implies that debtor countries have a harder tine obtaining new money than what they would have absent the small banks.
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