Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/233725 
Erscheinungsjahr: 
2020
Quellenangabe: 
[Journal:] Economic Inquiry [ISSN:] 1465-7295 [Volume:] 59 [Issue:] 1 [Publisher:] Wiley Periodicals, Inc. [Place:] Boston, USA [Year:] 2020 [Pages:] 459-477
Verlag: 
Wiley Periodicals, Inc., Boston, USA
Zusammenfassung: 
Theoretically, bank's loan monitoring activity hinges critically on its capitalization. To proxy for monitoring intensity, we use changes in borrowers' investment following loan covenant violations, when creditors can intervene in the governance of the firm. Exploiting granular bank-firm relationships observed in the syndicated loan market, we document substantial heterogeneity in monitoring across banks and through time. Better capitalized banks are more lenient monitors that intervene less with covenant violators. Importantly, this hands-off approach is associated with improved borrowers' performance. Beyond enhancing financial resilience, regulation that requires banks to hold more capital may thus also mitigate the tightening of credit terms when firms experience shocks. (JEL G21, G32, G33, G34)
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