We study how bank power affects the transmission of creditor right changes. We use a series of legal reforms in Italy and a unique database containing the universe of credits of one of the largest Italian banks. After deterioration in creditor rights, expected recovery rates, and credit amounts drop, while interest rates rise. Bank power dampens these effects at the cost of tougher renegotiations: older and more dependent clients receive more favorable credit terms, but see larger increases in legal actions for credit collection. Policies curbing legal enforcement may weaken the role of bank power in dampening economic shocks.
Rafael Matta is an associate professor of finance at SKEMA Business School. He has also served as an assistant professor of finance at the Amsterdam Business School, University of Amsterdam. Matta's research deals with issues such as the impacts of contracting frictions, creditor protection, and bankruptcy laws on non-financial and financial corporations. His research interests also include the transmission of monetary policy, bank panics, and the financial regulatory architecture. His work has been featured in the financial and legal media (Bloomberg, Harvard Law School Forum). Professor Matta has published in several leading economics and finance journals. His work is regularly presented at major finance conferences, such as the annual meetings of the American Finance Association, the Western Finance Association, and the European Finance Association. He currently serves as Associate Editor for the International Review of Law and Economics. He earned his Ph.D. in Economics from the University of Illinois in 2012, which he attended as a Fulbright scholar. He also holds an MA and a BA in Economics from the Federal University of Minas Gerais.
The seminar will be held in English.
More information: Giulia Baschieri (giulia.baschieri@unibo.it)