What Drives the Time to Resolution of Defaulted Bank Loans?
Posted: 28 Feb 2018
Date Written: 2016
Using a unique data base of Global Credit Data with individual loan information from small and medium sized entities in Germany, Great Britain and the United States, we evaluate the time to resolution of defaulted loans. A comparison across countries reveals country specific drivers for the resolution time which can be explained fairly well by differences in the regulatory and legal framework. Lenders seem to be aware of these differences and adjust their lending behavior in the limits set by these bankruptcy systems of the countries.
Keywords: credit risk, bankruptcy, resolution of financial distress, time to resolution, resolution bias
JEL Classification: C51, G01, G28
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