On-site inspecting zombie lending

Diana Bonfim; Geraldo Cerqueiro; Hans Degryse; Steven R. G. Ongena

doi:10.2139/ssrn.3530574

On-site inspecting zombie lending

Diana Bonfim, Geraldo Cerqueiro, Hans Degryse, Steven R. G. Ongena

Research output: Working paper › Preprint

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Abstract

In spite of growing regulatory pressure in most developed economies, “zombie lending” remains a widespread practice by banks. In this paper we exploit a series of large-scale on-site inspections made on the credit portfolios of several Portuguese banks to investigate how these inspections affect banks’ future lending decisions. We find that an inspected bank becomes 20% less likely to refinance zombie firms, immediately spurring their default. Overall, banks seemingly reduce zombie lending because the incentives to hold these loans disappear once they are forced to recognize losses.

Original language	English
Number of pages	67
DOIs	https://doi.org/10.2139/ssrn.3530574
Publication status	Published - 27 Feb 2020

Publication series

Name	Swiss Finance Institute Research Paper
No.	20-16

Keywords

Zombie lending
Bank supervision

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.2139/ssrn.3530574Licence: Unspecified

47733996Final published version, 729 KBLicence: Unspecified

http://hdl.handle.net/10400.14/38269Licence: Unspecified

1 Active

CUBE: Católica Lisbon Research Unit in Business and Economics
Machado, F. (PI), Aranda, A. M. (Researcher), Costa, A. I. D. A. (Researcher), Martins, A. P. (Researcher), Bernard, A. (Researcher), Fidalgo, A. (Researcher), Reis, C. (Researcher), Abecassis-Moedas, C. (Researcher), Santos, C. (Researcher), Tran, D. (Researcher), Fernandes, D. (Researcher), Bonfim, D. (Researcher), Schliephake, E. (Researcher), Kalogirou, F. (Researcher), Reis, F. (Researcher), Santos, F. (Researcher), Machado, F. (Researcher), Sguera, F. (Researcher), Cerqueiro, G. (Researcher), Reis, H. (Researcher), Barreto, I. (Researcher), Silva, J. (Researcher), Salvado, J. C. (Researcher), Neves, J. C. D. (Researcher), Gijsbrechts, J. (Researcher), Stahl, J. (Researcher), Guedes, J. C. (Researcher), Faias, J. (Researcher), Wagner, L. (Researcher), Correia, I. (Researcher), Saldanha, M. F. (Researcher), Fontes, J. C. (Researcher), Modesto, L. (Researcher), Meira, M. (Researcher), Matos, M. G. D. (Researcher), Gouveia, M. (Researcher), Kozeniauskas, N. (Researcher), Bertani, N. (Researcher), Couzoff, P. (Researcher), Barroso, P. (Researcher), Encarnação, P. (Researcher), Raposo, P. (Researcher), Teles, P. (Researcher), Bastos, W. (Researcher), Bohnsack, R. (Researcher), Vale, R. C. D. (Researcher), Ferreira, R. (Researcher), Lloyd-Braga, T. (Researcher), Ramus, T. (Researcher), Colaço, V. H. (Researcher), Cavicchini, A. (Researcher), Parada, P. (Researcher), Pieters, R. (Researcher), Pinto, F. A. G. D. L. S. (Researcher), Colaço, V. H. (Researcher) & Venter, Z. (Researcher)
1/01/20 → 31/12/24
Project: Research

1 Article

On-site inspecting zombie lending
Bonfim, D., Cerqueiro, G., Degryse, H. & Ongena, S., May 2023, In: Management Science. 69, 5, p. 2547-2567 21 p.
Research output: Contribution to journal › Article › peer-review

Open Access
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18 Citations (Scopus)

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Cite this

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ER -

On-site inspecting zombie lending

Abstract

Publication series

Keywords

UN SDGs

Access to Document

Fingerprint

Projects

CUBE: Católica Lisbon Research Unit in Business and Economics

Research output

On-site inspecting zombie lending

Cite this