Access to Credit in a Market Downturn

Barbara Casu (), Laura Chiaramonte (), Ettore Croci () and Stefano Filomeni ()
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Barbara Casu: University of London
Laura Chiaramonte: University of Verona
Ettore Croci: Università Cattolica del Sacro Cuore
Stefano Filomeni: University of Essex

Journal of Financial Services Research, 2024, vol. 66, issue 2, No 2, 143-169

Abstract: 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 instability. 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.

Keywords: Credit lines; Credit risk; Sovereign debt crisis; Credit rationing (search for similar items in EconPapers)
JEL-codes: G01 G21 G24 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10693-022-00388-x

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