Corporate Loan Spreads and Economic Activity
Anthony Saunders, Alessandro Spina, Sascha Steffen, Daniel Streitz
Review of Financial Studies,
No. 2,
2025
Abstract
We use secondary corporate loan-market prices to construct a novel loan-market-based credit spread. This measure has considerable predictive power for economic activity across macroeconomic outcomes in both the U.S. and Europe and captures unique information not contained in public market credit spreads. Loan-market borrowers are compositionally different and particularly sensitive to supply-side frictions as well as financial frictions that emanate from their own balance sheets. This evidence highlights the joint role of financial intermediary and borrower balance-sheet frictions in understanding macroeconomic developments and enriches our understanding of which type of financial frictions matter for the economy.
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Macroeconomic Reports
Macroeconomic Reports Local and global: IWH regularly provides current economic data - be it about the state of the East German economy, the macroeconomic development in Germany…
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Geopolitical turn intensifies crisis – structural reforms even more urgent The German economy will continue to tread water in 2025. In their spring report, the leading economic…
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Research Data Centre
Research Data Centre (IWH-RDC) Direct link to our Data Offer The IWH Research Data Centre offers external researchers access to microdata and micro-aggregated data sets that…
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Climate Stress Tests, Bank Lending, and the Transition to the Carbon-neutral Economy
Larissa Fuchs, Huyen Nguyen, Trang Nguyen, Klaus Schaeck
IWH Discussion Papers,
No. 9,
2024
Abstract
We ask if bank supervisors’ efforts to combat climate change affect banks’ lending and their borrowers’ transition to the carbon-neutral economy. Combining information from the French supervisory agency’s climate pilot exercise with borrowers’ emission data, we first show that banks that participate in the exercise increase lending to high-carbon emitters but simultaneously charge higher interest rates. Second, participating banks collect new information about climate risks, and boost lending for green purposes. Third, receiving credit from a participating bank facilitates borrowers’ efforts to improve environmental performance. Our findings establish a hitherto undocumented link between banking supervision and the transition to net-zero.
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Alumni
IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
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Climate Change Exposure and the Value Relevance of Earnings and Book Values of Equity
Iftekhar Hasan, Joseph A. Micale, Donna Rapaccioli
Journal of Sustainable Finance and Accounting,
March
2024
Abstract
We investigate whether a firm’s exposure to climate change, as proxied by disclosures during quarterly earnings conference calls, provides forward-looking information to investors regarding the long-term association of stock prices with current earnings and the book values of equity. Following a key regulatory mandate around the formation of the cap-and-trade program to reduce emissions related to climate change, firms’ climate change exposure decreases the association between current earnings and stock prices while increasing the relevance of book values of equity (i.e., historical earnings). However, these relationships flip when the sentiment around climate change exposure is negative, suggesting that the risks related to climate change exposure provide forward-looking information to investors when they evaluate the ability of current earnings to predict firm values. Such a relationship is stronger for new economy firms and is sensitive to conservative accounting. We also observe that the inclusion of climate change disclosure to our models improves the joint ability of earnings and book values to predict stock prices.
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IWH Construction Survey
IWH Construction Survey From 1993 until the first quarter of 2017, the IWH conducted regular surveys among companies. The results of these surveys could be used to promptly…
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IWH Industry Survey
IWH Industry Survey From 1993 until the first quarter of 2017, the IWH conducted regular surveys among companies. The results of these surveys could be used to promptly describe…
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Management Buyouts
Management Buyouts in Eastern Germany The study on management buyouts (MBOs) examines an important group of East German companies and their development: companies which, in the…
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