Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103163
Authors: 
Groessl, Ingrid
Levratto, Nadine
Year of Publication: 
2012
Series/Report no.: 
DEP (Socioeconomics) Discussion Papers, Macroeconomics and Finance Series 3/2012
Abstract: 
Economic theory conjectures complementarities between the ranking of creditors in formal insolvency proceedings and the use of collateral in bank loan contracts as well as the existence of relational compared to arm’s length lending. In this paper we seek evidence for these hypotheses taking France and Germany as examples which differ significantly concerning the ranking of in particular secured creditors. On closer scrutiny of empirical studies as well as statistical information we can neither confirm that a high priority for se-cured lenders explains an excessive use of collateral in bank loans nor that a priority for inside collateral promotes relational lending. Regarding relational lending we point to variables lying outside the insolvency law, like culture and history.
Subjects: 
Insolvency
France
Germany
bank-borrower-relationships
collateral
variety-of-capital-approach
law and finance
JEL: 
K12
K22
G21
G33
Document Type: 
Working Paper

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