Working Paper: NBER ID: w2704
Authors: Raquel Fernandez; David Kaaret
Abstract: This paper examines the effect that the coexistence of small and large banks, with different interests in the international market, has on the debt renegotiation process. Making use of a reputational model, we argue that the presence of small banks implies that debtor countries have a harder tine obtaining new money than what they would have absent the small banks.
Keywords: Debt Renegotiation; Bank Size; Reputation; International Finance
JEL Codes: G21; F34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Presence of small banks (G21) | Harsher terms for debtor countries (F34) |
| Capital exposure of large banks (F65) | Participation in involuntary loans (H81) |
| Collusive behavior of large banks (E44) | Terms of renegotiation (L14) |
| Competitive nature of small banks (G21) | Harsher terms for debtor countries (F34) |