Liquidation ou redressement des entreprises: décision de la banque et impact sur la probabilité de faillite

Catherine Refait-Alexandre

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: Banks are often regarded as responsible on the increasing number of corporate bankruptcies in France. How to explain their choice between contract termination and financial support when a debtor defaults? Does this policy influence debtor's default risk? Clues to bank's behaviour may be found in several literatures. First, models describing the resolution of financial crisis are presented (Van Horne 1976, Guigou 1995). Default risk is exogenous; banks maximise the discounted value of their claim and they only consider the expected profits of the firm. However, contract theory and banking theory analyse contract termination as a necessary incentive mechanism when information is asymmetric (Diamond 1984, Webb 1992). This mechanism may reduce default risk. Contract renegotiation can although be optimal (Bester 1994), even if an influence on debtor's behaviour can be created (Gorton et Khan 1993)

Keywords: Corporate bankruptcy; loan contract; asymmetric information; moral hazard (search for similar items in EconPapers)
JEL-codes: D82 G21 G24 G33 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1999-10
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Related works:
Working Paper: Liquidation ou redressement des entreprises: decision de la banque et impact sur la probabilite de faillite (1999)
Working Paper: Liquidation ou redressement des entreprises: décision de la banque et impact sur la probabilité de faillite (1999)
Working Paper: Liquidation ou redressement des entreprises: décision de la banque et impact sur la probabilité de faillite (1999)
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