EconPapers    
Economics at your fingertips  
 

Relationship Networks in Banking Around a Sovereign Default and Currency Crisis

Pablo D'Erasmo, Hernan Moscoso Boedo, Maria Olivero and Máximo Sangiácomo

No 19-43, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We study how banks? exposure to a sovereign crisis gets transmitted onto the corporate sector. To do so we use data on the universe of banks and ?rms in Argentina during the crisis of 2001. We build a model characterized by matching frictions in which ?rms establish (long-term) relationships with banks that are subject to balance sheet disruptions. Credit relationships with banks more exposed to the crisis su?er the most. However, this relationship-level e?ect overstates the true cost of the crisis since profitable ?rms (e.g., exporters after a devaluation) might ?nd it optimal to switch lenders, reducing the negative impact on overall credit and activity. Using linked bank-?rm and ?rm-level data we ?nd evidence largely consistent with our theory.

Keywords: Sovereign Default; Devaluation; Bank networks (search for similar items in EconPapers)
JEL-codes: E32 G21 H63 N26 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2019-10-29
New Economics Papers: this item is included in nep-ban and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.philadelphiafed.org/-/media/frbp/asset ... ers/2019/wp19-43.pdf (application/pdf)

Related works:
Journal Article: Relationship Networks in Banking Around a Sovereign Default and Currency Crisis (2020) Downloads
Working Paper: Relationship Networks in Banking Around a Sovereign Default and Currency Crisis (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:19-43

Ordering information: This working paper can be ordered from

DOI: 10.21799/frbp.wp.2019.43

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Philadelphia Contact information at EDIRC.
Bibliographic data for series maintained by Beth Paul ().

 
Page updated 2024-07-13
Handle: RePEc:fip:fedpwp:19-43