Bankruptcy regime and the banking system
Nicolae Stef and
Economic Modelling, 2020, vol. 87, issue C, 480-495
Banks’ behavior as creditors relies heavily on the content of legal rights granted by the national bankruptcy laws. Using a sample of 87 countries over the period 2005–2016, this paper investigates whether the degree of such legal rights influences the following banking indicators: (1) private credit, (2) bank lending-deposit spread, and (3) foreign banks’ presence. Robust dynamic panel estimates indicate a significant and positive impact only on foreign banks’ presence in countries with a high level of creditors’ protection and bankruptcy systems that encourage the survival of financially distressed firms.
Keywords: Private credit; Spread; Foreign banks; Bankruptcy; Creditors; Rights (search for similar items in EconPapers)
JEL-codes: G33 G38 K29 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:87:y:2020:i:c:p:480-495
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