Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/78055
Authors: 
Brunner, Antje
Krahnen, Jan Pieter
Year of Publication: 
2006
Series/Report no.: 
CFS Working Paper 2001/04
Abstract: 
In the recent theoretical literature on lending risk, the coordination problem in multi-creditor relationships have been analyzed extensively. We address this topic empirically, relying on a unique panel data set that includes detailed credit-file information on distressed lending relationships in Germany. In particular, it includes information on creditor pools, a legal institution aiming at coordinating lender interests in borrower distress. We report three major findings. First, the existence of creditor pools increases the probability of workout success. Second, the results are consistent with coordination costs being positively related to pool size. Third, major determinants of pool formation are found to be the number of banks, the distribution of lending shares, and the severity of the distress shock.
Subjects: 
bank lending
distress
workout
coordination risk
JEL: 
D74
G21
G33
G34
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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